Ramy, please tell us what you have implemented?
Z.com has been offering institutional liquidity services for a number of years now, however with the increased contraction in credit lines and capital pressures brought by an increasingly tougher regulatory environment, we felt that we were well positioned to become a dedicated conduit for that access and focus our resources on delivering a best-in-class service built around our competitive advantages. Z.com Global Markets is part of the GMO Internet Group and an affiliated company of GMO CLICK Securities, so we are able to effectively leverage the relationships from within our group with top tier prime brokers, tier 1 banks, leading non-bank liquidity providers and ECN venues to deliver consolidated access to entities looking to complement their existing liquidity stack, or enhance their breadth of liquidity to tier 1 sources.
Who are your services aimed towards?
Our clients are typically made up of regulated brokers and aggregators, hedge funds, asset managers and market makers, who typically look to interact with the market via an API and tend to be more latency sensitive, and clients who look to trade on a GUI such as tier 2-3 banks or asset managers and hedge funds with more specific requirements. The point of delivery does not always tell the full picture though, and to give one example, aggregators in particular may have clients interacting with their liquidity via an API or GUI which can affect the nature of the access which they require from us, so we always take a consultative approach in understanding what our clients are looking to achieve to provide a bespoke solution, rather than a one size fits all approach.
How have client requirements and expectations changed in recent times?
We have definitely seen a change in the landscape where providing a uniform price and technology solution was the norm, to now assisting clients to be more successful in achieving their business objectives and improve risk-adjusted returns. In previous times, a number of the clients we service may have had direct relationships with many of the top tier counterparties, however this may not be possible now for a number of reasons, and we are here to provide an efficient way to improve their pricing and access to the street from a consolidated source without the need to manage multiple relationships. These relationships all require resources - from the commencement of the legal relationship and the credit setup (3/4 way or carve out), the integration of technology and testing, market data fees and ongoing volume requirements necessary to maintain each relationship, so our value-add is that we take care of that and allow clients to get the high quality access they need right away in a cost effective way with minimal operational friction.
In what ways have you adapted your technology and liquidity stack to help clients with their liquidity requirements, and how can they leverage these benefits?
Our mission from the outset has to been to leverage our tier 1 relationships to create a one-stop for a range of clients to provide consolidated access to the nature of liquidity they require, no matter how big or small the client may be. The technology we have implemented also allows us the flexibility to give a client access to an aggregated feed of sophisticated liquidity tailored to their requirements, be it a sweepable stream, a full amount stream or both, or a single GUI which can interact with a range of liquidity pools and ECN order books simultaneously directly from the same point of access. We are also integrated with a large number of technology providers already, which allows our clients to be up and running quickly without the need for extensive integration work.
How can Z.com Global Markets help its clients to better navigate these volatile times?
“Unprecedented” is a word which I think we have all had enough of seeing this year, however there really are a number of challenges on the immediate horizon – whether it is the continuation of the global pandemic and the pressure this puts on financial systems with its unpredictability, an increasingly volatile US Presidential Election, and the end of the UK’s transition period with the European Union for its eventual withdrawal. This level of market volatility means that the reliable, consistent access we can provide to the top market makers is more important than ever, especially over our low-latency technology to offer the best execution experience possible.