Please remind our readers of the range of products and services that Spark Systems now offers and what types of clients you are providing FX solutions for?
Spark’s focus is on high volume FX trading clients. We build for them essentially a private ‘supermarket’ connecting them with their LPs and banks. Prices are streamed electronically and Spark then selects the best prices to execute the trades. Spark has three ‘live’ products to date; a hedge fund aggregator, a bank product and a broker/dealer platform. How has your business been doing since we last did an in-depth interview with your team a year or so ago?
Business has been developing well. We have seen volumes increase by almost 100% since this time last year. In fact volume and revenue growth has been tracking at 100% growth year on year since the incorporation of Spark. We saw our first $3billion day, $4billion day and most recently $5billion day in quick succession over the last 3 months. Daily average volume has also risen significantly.
In what ways have you recently been developing and enhancing your FX product set?
Spark has built AI into our product, we are able to recognise market liquidity conditions and suggest trading algorithms to optimise execution prices. Also Spark has market leading Transaction Cost Analysis (TCA) as well as Smart Order Routers (SOR) that can help make flows from users more benign and less toxic to LPs.
What makes your FX offerings increasingly attractive in such a competitive market?
In a nutshell Spark is better in that we are faster and more stable and most importantly we cost less to use. Equivalent platforms are charging between double to four times what we charge!
What factors have been driving the growth in FX trading across Asia and especially Singapore?
Singapore is obviously a major FX hub. But what is key is faster execution as rejection ratios are high especially when markets are volatile and fast moving. Spark is moving to 1 millisecond latency for execution that previously could take up to 360ms when matching the London and New York and 170ms to Tokyo.
That makes Singapore the main FX trading centre for price discovery and transparency not only for onshore parties and institutions but also for the region; Indonesia, Malaysia, Thailand, Philippines, Vietnam etc.
As has been mentioned before the heart of the challenge for Singapore is latency. What can be done to address this and what impact would that have?
The important factor is to match FX trades in Singapore. This is the cause of latency. It’s not enough to write a new program and optimise it or make it more efficient. There is a need to re-look at infrastructure design to achieve this.
In what ways does the growth in FX trading in Singapore present new opportunities for you to grow Spark Systems and take the company to the next level?
Spark aims to be the new global standard in platforms; FX and otherwise. Platforms are by nature global. While we have reached out to Singapore-based and regional institutions our focus is to be synonymous with stable and ultra-fast trading. In New York we will hook our clients up to NY4, In London with LD4 and in Tokyo in TY3 data centres. It make as little sense to hook a New York based hedge fund into SG1 as it does to hook a Singapore based hedge fund to TY3 or NY4! Speed and stability is everything.