Good to see the eagle eyed boys at Profit & Loss have now picked up on the analysis I did on Monday, showing that multi-dealer platform FX volumes took a significant 26% drop between Apr-Oct 2011, according to data released in the latest Bank of England semi-annual FX volume surveys here.
As Colin Lambert mentions in his excellent ‘And Another Thing‘ column today:
…. I think there has been a push back towards the bank platforms, especially as their algo execution (including aggregation), quasi-ECN and order management technology has continued to improve. I think the bottom line is that with a commoditised price and increased transparency, the argument for the MBPs is diluted a little and the judgement of where to trade comes back to which venue has the greater flexibility, range of tools and lowest cost. Price is pretty much a given and if a bank lets the customer down they will soon know about it in reduced business levels.
As readers to this blog will know, we have long-held the view that single-dealer platforms, are ideally positioned to be responsive and highly innovative, and able to deliver great liquidity to client’s at lower cost than the MDPs.