Kees Hollenbach Product Manager at Charles River Development
Kees Hollenbach Product Manager at Charles River Development

FX and the Buy-Side: FIX delivers

The advent of centralized Order Management Systems and electronic dealing for Forex has changed the dynamics of the Fund Manager’s trading desk says Kees Hollenbach.

First Published: e-Forex Magazine 15 / Standards / July, 2004

For a long time, Forex has been considered the ‘step-child’ of the Fund Manager’s trading desks. The spot FX is often done by a trader with the broker at trade execution time, with the custodian by the back-office at settlement time, or by a part-time Fixed-income/Equity trader who doubles as the FX trader. The advent of centralized Order Management Systems and electronic dealing for Forex has changed the dynamics.Business Changes Margins are being squeezed in the Equities and Fixed Income worlds, and as a result International Fund Managers have started to focus on executing their currency trades more effectively and efficiently. A recent market audit has found that Fund Managers could cut their transaction costs from 0.23% of turnover to as little as 0.06% - the typical bid-offer spread in the currency markets – by moving the Forex trades from the custodian to a third party venue. Furthermore, by blocking Forex trades in the Order Management System (OMS) and executing them...continued

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