Ron Clarke Deputy CEOOne-Ten
Ron Clarke Deputy CEOOne-Ten

STP and eFX: choices facing Fund Managers

Ron Clarke examines what progress there has been in implementing STP solutions for electronic FX trading amongst Fund Managers.

End to end Straight-Through Processing (STP) is perhaps one of the most attainable Holy Grails for the fund manager. With the myriad of vendors and service providers to choose from, what exactly is going on, and why isn’t there a much larger penetration of eFX in the fund management community? There are probably as many answers to this question as there are fund managers. But if we focus on some of the more basic issues that confront the fund manager we can gain some insight as to the common ground that’s holding back the universal adoption of eFX.The basic motivation for most corporate treasuries in the execution of FX transactions is to hedge currency risk and support underlying trade in goods and services. The motivation for fund managers is to hedge currency risk and seek a relatively better performance than other fund managers. This subtle difference offers a clue to what may be going on.For the fund manager, client accounts will be split into those where discretion is...continued

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