Single Dealer Platforms – marking the end of uncoordinated e-trading delivery channels

It is somewhat against expectation that the value proposition of single dealer platforms (SDPs) in the FX market continues to strengthen and as Nicholas Pratt reports, they are now considered the prime relationship channel for increasing numbers of FX providers.

First Published: e-Forex Magazine 49 / Features / October, 2012

Since electronic trading in FX began to be adopted at the turn of the millennium, there has been a continuous battle for buy-side business between the multibank portals offering access to numerous liquidity providers from a single source and the SDPs offering numerous services form a single provider.  There have been highs and lows for both sides of this competition but neither has struck a decisive blow and, no matter how counter intuitive it may seem, both multibank portals and SDPs continue to develop apace. Both sides may claim to be of more value to buy-side customers than the other and this may be hard to prove. The value proposition of an SDP for the banks is easy to argue – there is a single and coherent point of contact that enables the banks to maintain their relationships with their customers rather than being one of many on a multibank portal or electronic communications network (ECN). But does this compelling sell-side advantage also work for buy-side firms and, if so, does it...continued

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