CLS FX Settlement Service: Apr 15 vol figures -9.9% broadly inline with other platforms

The CLS FX settlement system has reported a -9.9% drop in the average daily value of FX trades settled through their platform in Apr 15, taking volumes back down to $4.64trillion/day.

The monthly drop is slightly below falls reported last week by the major FX spot platforms which saw falls ranging from -10.6% for Reuters to -15.4% for EBS.

Details from the platform and charts are as follows: Continue reading

EuroMoney 2015 FX Rankings: Citi #1 again, but top banks continue to lose market share

The annual EuroMoney FX ranking for 2015 have just been released, and they make interesting reading.

Key findings from the EuroMoney 2015 survey:

  • Citi takes 1st place, for the 2nd year running, with a market share of 16.11% (slightly up from 16.04% in 2014) and more than doubling its 7.49% share from 2008. (see here for Citi Velocity post which is built using Caplin technology)
  • JPM sees largest gain in market share of top 15 up 2.1% to 7.65% (5.55% in 2014)
  • UBS see biggest fall in market share of top 15 down -3.58% to 7.3% (10.88% in 2014)
  • Share of top 5 banks shows largest fall down -5.34% to 53.71% (59.05% in 2014)
  • Share of client volume executed electronically 53.2% (up from 40% in 2011) and first time a majority executed electronically
  • HSBC #1 in corporate FX flow (Citi loses top place held since 1976)

But what stands out again, is that the Continue reading

FX Platforms – Apr 15 vol: All platforms showing falls, with EBS off most at -15%

The major OTC FX platforms have now reported their April 15 volumes. All the platforms reported falls ranging from -2% for FastMatch to -15% for EBS, following strong gains in March.

Looking in more detail we see the individual platform figures as follows: Continue reading

ICAP results, refocus of business on facilitating market efficiency and access to liquidity

The regulatory reforms of Dodd Frank, MiFID II, EMIR and Basel III, are fundamentally changing the structure of Global OTC markets. As a result, participants face higher costs for regulatory capital, mandatory trading of standardised derivatives, increased pre-trade transparency and post-trade reporting and a drive to central clearing.

On top of which banks have been hit with multi-billion dollar fines for manipulation of LIBOR rate fixings, and market collusion around FX manipulation.

As a consequence, banks are re-engineering their businesses, shifting from capital intense (balance sheet consuming) activities to ‘capital light’ business models, driving down costs by moving from voice to electronic execution, from bilateral to cleared and from principal to agency – capital efficiency, low risk, client servicing is the name of the game.

Whilst challenging traditional business models, the regulatory reforms have also created opportunities for innovative new trading platforms, regulatory compliant market infrastructure, and services that facilitate the ‘capital-light’ business models.

Inter-Dealer Brokers (IDBs), the middle men matching buyers and sellers in the OTC markets, have been quick to spot opportunities to re-invent themselves, and invest in new technology solutions that will enable them to remain at the centre of execution in the new market order.

ICAP, the biggest of the IDBs, gave a glimpse under the hood of these changes in their full year results which were released yesterday, and although overall revenues are down 7%, they make fascinating reading in the trends that they reflect, and the speed by which IDBs are re-positioning the business to benefit from the changes in market structures and drive to market efficiency.

  • Overall revenues down 7%
  • Electronic Markets & Post Trade services account for 75% of profits (70% prev)
  • Post-Trade revenues up 8% driven by Tri-Optima and Traiana
  • Merger of FX (EBS) and Rates (BrokerTec) into a single offering (accounting for 64% of group revenues) took six months: EBSBrokertec
  • Electronic markets revenue split: EBS 48% (46%prev), Brokertec 49% (50% prev)
  • Headcount changes: Global broking -24%, Electronic markets +12%, Post-Trade +10%
  • Moving outside the traditional inter-dealer market, to service segments traditionally seen as customers (buy-side firms) such as hedge funds, asset managers, retail brokers
  • Spend on new initiatives £43mln
  • Including EBS Direct, EBS Select, eFIX, new HTML5 platforms,

ICAP investmentInvestment in new Products by ICAP

EBSDirect, the new relationship based FX platform from EBS has proved a huge success, as can be seen from the volume figures below:

EBS Direct VolumesEBSDirect Monthly Volumes

Interestingly, Tradition another major IDB, has also been exploring opportunities from new market structures, and recently announced the launch of a new electronic repo-market DBV-X to facilitate the efficient use of collateral.

Regional banks upping their game, as Standard Bank rolls out an award winning SDP

We often comment on how regional banks are upping their game, and investing in new single-dealer platforms (SDPs) to enable them to better serve, protect and grow their client franchise.

With that in mind, it was great to see that Standard Bank’s newly upgraded SDP eMarketTrader has just been voted Best Super Regional Bank SDP’ in the Profit & Loss 2015 Digital FX Awards.

According to Profit & Loss editor Colin Lambert:

For the first time in three years a new entrant joined the winners’ circle: Standard Bank.

Banks continued to invest in what remains their number one channel for connecting with clients.

It is heartening to see so many banks outside the top 10 investing in their technology also – a single dealer platform will be vitally important for these institutions if they are to service their core client base going forward.”

This is a big achievement for Standard Bank, as the ‘winners circle’ is made up of Continue reading

CLS FX Settlement platform Mar15: Vols up +5.7% to $5,150bln/day

The CLS settlement system has reported an +5.7% increase in the average daily value of FX trades settled through their platform in Mar 15, taking volumes back up to $5,150bln/day.

The monthly increase being far lower than that reported last week by the major FX spot platforms which saw increases ranging from 15% to 22% for the major platforms.

Details from the platform and charts are as follows: Continue reading

How should Investment Banks capitalise on the new Apple Watch for financial trading? (from Caplin’s tech blog)

At Caplin we run two blogs. This business focused blog, and our hugely popular tech blog called Platformability.

The tech blog mainly deals with technology issues, particularly those surrounding agile development and using native web technologies to build high-performance real-time web apps for financial trading.

It also looks at UX design, code testing and occasionally more diverse topics such as the psychology of UX design or how office environments can be, or not be, conducive to productive work.

As the audiences for the two blogs tend to be quite different, we rarely cross-post between the blogs.

However, given that today sees the new Apple Watch going on sale (apparently only in six stores globally), our tech team has marked the occasion by posting a discussion on how the Apple watch might be used by banks in finance, and it’s certainly worth a read.

With the launch of the Apple Watch Caplin wanted to board the wearable tech bandwagon. We wanted to ask the questions why and how should a sell side Investment Bank want to use wearable tech?

How should Investment Banks  capitalise on the new Apple Watch for financial trading?

Here is a link to the full post: How should Investment Banks capitalise on the new Apple Watch for financial trading?


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