eFX volumes Single Dealer Platforms vs Multi Dealer Platforms


Research by Greenwich Associates (released in March 2010) states that around the world, multi-bank electronic trading platforms captured about 40% of overall FX trading volume in 2008-2009 and single-bank platforms captured another 15%.

However, the two most authoritative sources of actual empirical data on FX activity, namely the Bank of England (BoE) and the Bank of International Settlements (BIS) seem to paint a very different picture!

Bank of England (BofE): Empirical data released by the Bank of England (Oct 2009), covering FX activity between reporting dealers and clients in London (the largest global FX market), shows that single dealer platforms (SDPs) accounted for 25% of all electronic FX volume, compared with only 13% of electronic volume done through multi-dealer platforms (MDPs).

(BoE):London daily eFX volumes by SDP and MDP (2009)

Bank of International Settlements (BIS): The most definitive empirical data on global FX volumes is produced every three years by the BIS in their Triennial survey. Data from the 2007 triennial survey shows a similar picture to the BoE data. Whilst eFX accounted for 34% of all global daily FX volumes, SDPs accounted for nearly 30% of all electronic FX volume, compared with only 21% done through MDPs, as shown below:

(BIS): Global daily eFX volumes by SDP and MDP (2007)

The 2010 Triennial Central Bank Survey of FX activity will be released in August, and should prove fascinating reading in terms of the latest trends.

5 Responses

  1. [...] of SDPs in Fixed Income Posted on August 25, 2010 by Mike Hill Following Paul Blank’s post in May of this year about the market share of single-dealer platforms vs mul…, I’ve been looking at a number of industry surveys, and the thing that leaps off the page at me [...]

  2. cheers for this

  3. [...] But in the end, I had to raise my hand and proceed to explain why (in my opinion) that was not the case, and that volumes traded through single dealer platforms were running at twice the levels traded via the multi dealer platforms (see my previous blog on eFX volumes Single dealer vs multi dealer). [...]

  4. [...] The report makes reference to data from the 2010 BIS FX Triennial survey some of which I have covered in my blog back in December, and touched on these findings as part of an analysis of etrading by single and multi dealer platforms. [...]

  5. […] platform” needed a lot of explanation, and while single-dealer platforms (SDPs) already accounted for 25% of all electronic FX volume back in 2010, the business benefits were something of a revelation to all but a few tier 1 and 2 banks. We wrote […]

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