Last year, in these pages, ClientKnowledge noted that the market had shifted, over the last ten years, from a broadly, simple single-dimensional market (from interdealer brokers to sell-side to buy-side) to a more complex multi-dimensional space, where those definitions were much harder to apply. 2005 has seen two par-allel evolutions along similar lines, both materially fuelled by technology. The first is the changing roles and types of trading, rendering the old neat segmentation into providers and clients inadequate.

The second is the growth of aggressive, or alpha-seeking, activity (and outsourcing of liquidity) which tend to oblige market participants to be more disciplined about why and how they trade and, not insignificantly, how they process their trades.

The background to all of this is a growing and healthy market-place. Three lots of data recently issued paint a congruent picture: sell-side surveys by the Federal Re-serve Bank FX Committee and the Bank of England Foreign Exchange Joint Stand-ing Committee, covering dealers activities in their respective centres and Cli-entKnowledges annual study into buy-side activity, speaking to more than 2,000 corporations, real and leveraged money-managers, client banks and other interme-diaries. Together, these paint a revealing picture of the significance of these different participants and how the markets structure is evolving.

The Bank for International Settlements most recent triennial surveys of the foreign exchange market have revealed a sharp drop in overall volumes between 1998 (US$1.5trn) and 2001 (US$1.2trn), followed by an even more marked rise as at 2004 (US$1.9trn).