James Kemp Managing Director of Stentra, the specialist investment banking e-trading technology consultancy group, examines the drivers and impacts of the internalisation model.
James Kemp Managing Director of Stentra, the specialist investment banking e-trading technology consultancy group, examines the drivers and impacts of the internalisation model.

The Internalisation model: helping the sell-side extend the e-FX value proposition

James Kemp examines the drivers and impacts of the internalisation model.

First Published: e-Forex Magazine 27 / Features / April, 2007

Overview With the rapid growth in the eFX trading market, sell-side Financial Institutions are set to continue re-inventing their trading practices to evolve with the changing marketplace as they compete with the multiple electronic trading opportunities obtainable to buy-side firms. As a result top tier banks are taking this time of change to review their pricing methods and focus on their internal mechanisms to achieve greater efficiency and increase potential profitability. In parallel they are also taking time to review their trade flow cycle investigating opportunities to differentiate themselves and increase profitability by offering an enhanced service to buy-side firms Market Drivers With the increase in the number of e-trading portals available, such as Hotspot and Lava as well as electronic access to EBS and Reuters via Prime Brokerage, buy side traders are becoming less reliant on the sell-side to accommodate their trading activity. In addition, trading via multi bank portals has a tendency...continued

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