Will a new generation of trading venues bring more fairness and efficiency to FX?

With Roger Rutherford, Chief Operating Officer at ParFX, Harry Gozlan, Executive Chairman of SmartTrade Technologies, and Ty Danco, CEO of Buyside FX.

First Published: e-Forex Magazine 51 / Debate / April, 2013

What do you consider to be the most serious shortcomings and inefficiencies of many existing FX trading venues and ECNs? HG: It seems that we have several categories of dangers affecting the venues. For the large dominant players, there is a shortcoming of innovation and lack reactivity to the changes of the market landscape, but the breadth of their network, the depth of their liquidity and the strength of their balance sheet maintain a key advantage over new entrants. For the new entrants, there is a tight rope between getting enough funding and bringing enough liquidity inside, and we can see that creating a new business model in the way liquidity is rewarded and charged is not enough to attract instantly a lot of quotes. TD: Certainly there are issues for “real money” buyside accounts about many of their trading venues: most critics point out fairness issues, such as ECNs giving “last looks” to dealer—sort of a “heads I win, tails I don’t lose”...continued

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