Posted on December 9, 2013 by Paul Blank
The Bank of International Settlements (BIS), has just released a in-depth analysis of the recently released 2013 Triennial FX Survey, looking at the changing structure of the FX market, and drawing some conclusions.
Some of this was covered in our recent coverage of the 2013 Triennial FX Survey, some of the key points of which are shown here, but worth reading the report in full.
- Non-dealer financial institutions were the major drivers of FX turnover (much through the use of prime brokers)
- The reporting dealer market, by contrast, has grown more slowly (partly due to internalisation of flow by top tier banks), and
- Trading volume of non-financials (mostly corporates) has actually contracted
- In today’s market structure, electronic trading dominates. It is the preferred trading channel, with a share above 50% for all customer segments.
- Non-financial institutions mostly prefer direct contact with their relationship bank, either via the phone or via a single-bank platform.
- Financial customers are less loyal to their dealer often trade either directly with dealers electronically direct electronic price streams), or indirectly via multi-bank platforms and electronic brokerage systems that were previously the exclusive venues of inter-dealer trading
- Retail accounts for some 3.5-3.8% of daily FX volumes
The climb in FX turnover between 2010 and 2013 appears to have been mostly (more…)
Filed under: BIS, FX, Paul Blank, Single-Dealer Platforms, Survey Results, Web trading technology | Leave a Comment »
Posted on November 27, 2013 by Paul Blank
Caplin are at FXWeek Europe today, so if you at the event, please come on over and say hi to the team.
Paul Caplin, CEO will be speaking in the 11.30 Panel discussion on “The future of e-FX: taking advantage of key trends and serving the client“. which will look at:
- Understanding the key systematic trends driving the e-FX market
- Is it possible to have a standalone e-FX strategy?
- How you can take advantage of the booming technological innovation
- The platform debate-which will better suit your needs, SDP or MDP?
- Sourcing low latency, 24 hour liquidity
Paul Caplin (center) speaking at FXWeek Europe panel discussion this morning
Elsewhere, looking at the program, the last panel discussion of the day also looks interesting: View from the top: in conversation with the FX business heads. and includes
Filed under: FX, Paul Blank, Single-Dealer Platforms | Leave a Comment »
Posted on November 6, 2013 by Paul Blank
The evolving global regulatory landscape is fundamentally changing how banks operate, the returns available, the business lines and markets in which they can effectively compete, and the way in which they interact with and service their clients via their Single-Dealer Platforms.
For example, under Dodd Frank, standardised swaps trading with clients will migrate from OTC bilateral trading, over to regulated venues such as SEFs. This will see the value proposition and revenue generated for banks likewise shift from a (more…)
Filed under: OTC, Paul Blank, Regulation, SEF, Single-Dealer Platforms, SWAPS, Technology Trends | 4 Comments »
Posted on October 9, 2013 by Paul Blank
Interesting article in the FT about how banks are starting to copy Amazon’s data mining capabilities to help cross sell research on listed companies.
Banks are analysing how clients read and use research documents in order to help them sell additional ‘targeted products’, based on what they and their peer groups have previously bought.
The article quotes Neil Shah, director at Edison Investment Research, who talks about how banks are starting to adopt technology that: (more…)
Filed under: Paul Blank, Single-Dealer Platforms | Leave a Comment »
Posted on October 2, 2013 by Paul Blank
Emerging regulations under Dodd-Frank’s execution and clearing mandates and the higher capital requirement ratios under Basel, are driving huge changes in the business models for investment banks.
Under Dodd Frank, following the introduction of SEFs, banks will be prohibited from trading directly with clients on a bilateral basis in standardised swaps. Instead, bank Single-Dealer Platforms will provide SEF aggregation and routing capabilities of client orders through to one of the now 17 registered SEFs.
Whilst for capital-intensive markets like credits, banks are moving away from providing costly inventory based principal trading and moving to an agency model such as UBS PIN. In these markets, the value proposition for the bank shifts downstream, where the bank will provide value added smart order routing (SOR), clearing and collateral management and optimization services, to offset the reduction in trading profits from these products.
But what about FX? Lightly regulated (in comparison), and by far the largest and most liquid of all the global markets, with latest BIS Triennial data showing that daily volumes have grown 34% to reach $5,345 bln/day.
Is there still money to be made here, and if so by whom, and what’s the competition like?
Filed under: FX, Paul Blank, Single-Dealer Platforms, Web trading technology | 1 Comment »
Posted on September 13, 2013 by Paul Blank
Bank of America Merrill Lynch (BAML), has launched a new FX Prime Broker Service (FXPB) on their Silverlight Mercury Platform.
The FXPB platform provides suite of client-driven solutions including access to position and trade rolling, trade matching, credit monitoring, live trade search and intra-day valuation reporting. (more…)
Filed under: FX, Paul Blank, Single-Dealer Platforms | Leave a Comment »
Posted on September 10, 2013 by Jennifer Reid
Paul Caplin on why single-dealer platforms are set to play an ever-larger role in the market of the future, especially regional banks. http://lnkd.in/_NV3Ud
Single-dealer platforms are likely to play an ever-larger role in the markets of the future, especially for regional banks, by Paul Caplin, CEO Caplin Systems. Trading was simpler in the old days. Some instruments, like equities and futures, were… click here to read more.
Filed under: Paul Caplin, Single-Dealer Platforms | Leave a Comment »
Posted on August 28, 2013 by Jennifer Reid
As part of our preparation for Trading Architecture Asia, WBR interviewed Caplin CTO Patrick Myles about how single-dealer platforms have evolved over the last few years. The interview is now up on the show’s main site – take a look!
Patrick participated in today’s panel discussion “Panel Discussion: Developing a trading architecture that can support multiple asset classes from the same front end.” He also recently published the well received “HTML5 in 2013 – Where Next?” Click here to request your copy.
Filed under: AsiaPac, Patrick Myles, Single-Dealer Platforms | Leave a Comment »
Posted on August 5, 2013 by Paul Blank
Another interesting development in the adoption of the SEF rules which come into force today.
In addition to listing mandated products (that are mandated to trade on a SEF and be cleared via a CCP), a SEF may list products that are not mandated to trade (or clear). Such transactions would be termed ‘Permitted Transactions’. Which on the face of it doesn’t sound a bad thing.
Filed under: Dodd Frank, FX, Paul Blank, Regulation, SEF, Single-Dealer Platforms, SWAPS | 3 Comments »
Posted on July 31, 2013 by Paul Blank
An excellent update to Tabb Group’s SEF barometer has just been published, which was based on a survey of over 150 participants (from dealers, buy-side and vendors).
Key findings are:
- Discontent is high on the final outcome of the swap rules, but consensus is low on the reasons why
- Exchanges are perceived to benefit the most from the new rules, as product standardization drives the swaps market closer to order book trading and accelerates the migration to swap futures (more…)
Filed under: CCP, CFTC, Dodd Frank, Paul Blank, Regulation, SEF, Single-Dealer Platforms, Survey Results, SWAPS | 1 Comment »