Nicholas Pratt
Nicholas Pratt

Overcoming current obstacles on the path towards true web-based STP FX connectivity

The FX industry is unique compared to other asset classes in that it has an unparalleled level of fragmentation and segmentation and simply so many ways of doing things. Similarly there is a huge variety of participants in the market, all with different motives, from the high frequency hedge funds looking for arbitrage opportunities among global currencies to the corporate treasurers needing to pay bills in various currencies.

As with other asset classes there has been a large take-up of electronic trading. Thanks to the advancement of internet-based technology there are now options beyond the single bank entities that existed in previous years. Multi-bank portals have sprung up with increasing regularity over the last ten years including a number of targeted platforms aimed at the various different participating groups. Not only is there fragmentation and segmentation in liquidity sources, trading platforms and participating groups but this fragmentation is also increasing. Added to all of this is the increase in the sheer volume of trading in the FX market. Achieving STP All of which makes connectivity and straight through processing that much harder to achieve. “The volume of real electronic trading has gone up substantially in the last few years,” says Jay Hurley, vice president for Morgan Stanley’s fixed income division and also co-chair of the Global Foreign Exchange Committee at the standards body...continued

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