Inviting expert guest contributors to SingleDealerPlatforms blog


Dear Readers,

The SingleDealerPlatforms.org blog is nearly six years old. During that time, it has built a loyal and focused following, by providing insight into the dealer-to-client e-trading space. Exploring new trends and emerging opportunities, and looking at the business, technical and regulatory challenges facing participants.

Given the focus, it’s not surprising the blog is popular within banks. Actually, over Continue reading

LMAX FX report: Restoring trust in global FX markets (well worth reading)


Just finished reading a new report and survey from exchange operator LMAX, called “Restoring trust in global FX markets – Striking a balance between transparency and efficiency”.

It’s detailed, with lots of charts and tables and expert opinions, and covers much ground, including topics explored in recent posts around transparency, the FEMR report, and the issue of last look and more.

David Mercer, CEO of LMAX starts by stating:

Liquidity providers (LPs) and market makers need to be rewarded for the risks they take, and in order to enjoy the benefits of transparent price discovery and firm liquidity, customers must meet the costs of the service provided. Fair execution must come at a fair price, and transparency cannot come at the cost of destroying liquidity provision.

Customers have benefited from new technology, with spread compression and lower commissions. However, traditional LPs have had to invest heavily in technology to support globally distributed client base, whilst facing ever more sophisticated buy-side customers and smaller, more naturally agile competitors in the realm of liquidity provision (ie: non-bank market makers).

Mercer, adds that there is much that LPs can learn from these new entrants, including:

elements of exchange-style trading that create a fairer trading environment.

Proposals currently being considered to enhance transparency in the FX market risk disadvantaging Continue reading

Moving legacy SDPs to HTML5 (in stages)


Given the ubiquitous ‘write once, deploy anywhere’ nature of HTML5, it’s not surprising that almost all new Single-Dealer Platforms (SDPs) are being written in HTML5.

The trend started a while back, and in his 2013 white paper, HTML5 in 2013: Where Next? (2nd one in the list), Patrick Myles, Caplin CTO identified three key reasons why everyone was moving to HTML5:

  • The move to cloud delivered services and Internet distributed applications has driven the need for lightweight, access-anywhere GUIs.
  • Apple and Google have embraced HTML5 as the future, building new-generation browsers themselves for the first time.
  • The drive to mobile and tablets, and the desire to re-use apps and code across platforms

Although, as Myles pointed out, there are challenges with HTML5, as it lacked many of the enterprise development features and tooling that developers expect and need to efficiently build large-scale, maintainable apps. It’s still evolving, meaning not all features are universally supported. Continue reading

Nasdaq prepares to launch own FX platform


Exchanges can’t seem to get enough of FX!

Following the recent spate of exchanges buying FX platforms (Deutsche Boerse buying 360T, BATS Global Trading buying Hotspot, and talk of ICE buying FastMatch), we now hear Nasdaq is readying the launch of their new FX platform.

NasdaqSo, what’s the attraction?

Well, for one thing size, at $5.3tn/day, it’s by far the largest globally traded market. It’s predominantly a bilaterally traded OTC market, highly liquid and although decentralized and fragmented into multiple liquidity pools, is nonetheless very efficient and increasingly electronically executed.

The size and liquid nature of the market play to the scale and efficiency of exchange infrastructure.

But, this is about more than size. Continue reading

EBS and FXall looking to service Corporate Treasurers – so where does that leave bank SDPs?


The two main FX platform providers, ICAP’s EBS BrokerTec and ThomsonReuters have both announced new multi-dealer offerings to better service corporate treasurers.

EBS BrokertecEBS BrokerTec has announced they are integrating ICAP’s My Treasury, their fully disclosed relationship based multi-product, multi-bank, multi-fund, multi-currency solution for corporate treasurers into the EBS platform. The new offering will be called EBS Treasury, and will be available later this year.

EBS Treasury will offer: FX spot, FWD, Swaps, with FX pricing from EBS Direct. Trading will be provided by Streamed RFQ (request for stream), which is a new addition to EBS Direct’s execution functionality. The streamed RFQ will allow banks to stream tailored prices to corporates. EBS Treasury will improve efficiency for corporates that currently source FX liquidity and money market products from multiple providers. EBS Treasury will be designed to integrate seamlessly into existing treasury management systems.

Justin Meadows, CEO of MyTreasury,  said: Continue reading

BofE FX Survey data: London FX vols down 8% in Apr 15, whilst USD/CNY vols +25% (now 9th largest curr pair)


The Bank of England today released their latest semi-annual FX turnover survey results for Apr 2015.

Highlights on London FX volumes for Apr 2015

  • Total FX vol  of $2,481bn/day, fell -8% compared to the record level seen in Oct 2014, but still showed a +5% YoY gain
  • Spot FX vol fell -13% to $973bln/day compared to Oct 2014, although still up some +24% YonY
  • USD/CNY activity increased by 25% in April 2015 to $43bln/day, a new record high, and is now the 9th largest FX pair.
  • USD/JPY vol fell -25%, returning back to October 2013 levels.
  • MDP vol fell –16% compared to Oct 2014 at $406bn/day (+12% YonY)
  • SDP vol fell -12% from Oct 2014 at $276bln/day (still down -11% YonY)
  • Ratio of SDP/MDP vols rose slightly (in favor of SDPs) to 68%, compared to the low of 65% seen in Oct 2014

Volumes never really recovered following the Swiss National Bank’s EURCHF event in January. Below are full details, charts and some interesting observations on the data. Continue reading

Why SDPs should provide TCA tools for buy-side clients


The majority of single-dealer platforms (SDPs) – especially those of regional banks, provide mainly principal (rather than agency) based pricing to clients. That’s where the bank takes the other side of the trade (even if the bank covers the trades by back-to-back hedging with their liquidity providers), making their money on the spread, rather than helping the client achieve the best execution for the transaction, and charging a commission for the service.

Whilst corporate and non-financial clients will happily use SDPs, we are seeing Continue reading