SPECIAL SIBOS 2019 FX REPORT EDITION
CHANGING STRUCTURAL DYNAMICS IMPACT THE FX SELLSIDE
SEIZING THE OPPORTUNITY OF REGTECH IN FX
SWIFT WORKS TO UNLOCK THE VALUE FROM ITS FX DATA
USING INDEPENDENT DATA TO HELP MANAGE FX COSTS
THE FUTURE ROLE OF BANKS AS LIQUIDITY PROVIDERS
MORE AUTOMATION IN FX TRADE LIFECYCLES
WHERE TO INVEST NEXT IN FX FINTECH
King Dollar’s iron throne will be under threat during the second half of 2019 as expectations intensify over the Federal Reserve embarking on a monetary policy easing cycle....show more
Moving into the start of Q3 of the current financial year, the low point - as we can see in our previous analysis back in the start of May 2019 - according to our estimations has been reached (1.11) and the pair has since changed its trend and seems to be rather bullish as the Euro managed to break above significant resistance and psychological levels after two consecutive upward rallies, currently trading around the 1.1330 level, having first reached 1.1412....show more
Prime Minister Shinzo Abe has twice avoided raising the consumption tax, quoting domestic and international economic uncertainties. This time however, despite mixed economic signals and the tax’s unpopularity among voters. Abe appears determined to go ahead with raising the tax. His administration last month approved an annual economic plan confirming the hike in order to cover spreading social security costs....show more
The Australian Dollar advanced after the latest official figures cast China’s economy in a resilient light despite the ongoing trade spat with the US. This helped to boost sentiment toward all risk-sensitive assets and leave the Aussie well placed. However constant global rate cut discussions could be about to put the stoppers on the potential for long term upside....show more
Much has already been said on the topic of Belt and Road and its affect on the global economy moving forward. There is also debate on, if and when the UK will join other European nations in adopting the grand project officially. One thing that cannot be denied is the important role that London will play as the place to make all of the financial arrangements happen....show more
David Woolcock explains why we can expect to see a bright future for shared co-operative platforms in FX....show more
Welcome to our special Sibos 2019 FX Report. This year Sibos is taking place in London and the conference theme – thriving in a hyper-connected world – recognises the challenges, and opportunities that mass digitisation and data-driven relationships present for the Sibos community....show more
In 2019, the wholesale FX market is not the market of yore. Formerly, the defining characteristic of the currencies trading landscape was liquidity fragmentation and siloed pools of cash held within geography-specific currency pairings. Following the financial crisis, commercial, regulatory, trading technology costs management and technological advancement pressures eroded the broker-dealer centric market structure in liquid instruments, paving the way for new, exchange-like all-to-all (A2A) market structures within the leading liquidity centres. ...show more
With more than 2,000 asset managers and corporates already using the SWIFT network to confirm their FX trades with and through banks as well as FX platforms and non-bank liquidity providers, SWIFT users can adopt and implement the principles of the FX Global Code in their day-to-day business without incurring significant cost. An asset manager’s use of SWIFT, for example, could itself facilitate alignment with up to 14 of the Code’s 55 principles. Nevertheless, many buyside firms have still not signed up to the Code. eForex spoke to Galina Dimitrova, Director for Investment and Capital Markets at The Investment Association, to discover buyside attitudes to the Code....show more
FX market participants have traditionally approached technological solutions for regulatory compliance as a series of tactical projects where the goal is to implement the minimally viable solution in the shortest possible time frame. Given the rapid pace of regulatory change in the past few years, it is easy to see why many institutions have built infrastructure that is regional, siloed by asset class and product, reliant on manual processes, and expensive to update. Here we ask Jeff Heine, Chief Revenue Officer at Ascent RegTech to tell us more about how RegTech can help FX trading firms overcome many of the issues associated with tackling regulatory growth....show more
Earlier this year the Bank for International Settlements (BIS) launched the 12th Triennial Central Bank Survey of Foreign Exchange and Over-The-Counter (OTC) Derivatives Markets. Conducted every three years since 1986, the Triennial Survey is the most comprehensive source of information on the size and structure of global foreign exchange and OTC derivatives markets. It aims to help central banks, other authorities and market participants monitor developments in OTC markets and inform discussions about reforms to OTC markets. As we await the preliminary results for turnover which are due to be published by the BIS in September 2019 we asked Andreas Schrimpf, Principal Economist, Secretary to the Markets Committee at the BIS to give us a little background information about the survey and its history....show more
Robust and reliable data is a core requirement for participation in FX markets at any level and in any capacity. But where can such data be sourced in sufficient depth and in real-enough time to hold its value through any transactional or analytic requirement? e-Forex spoke to Juliette Kennel, Head of Securities and FX Markets, SWIFT, and Sam Romilly, Head of FX New Business Development, Capital Market, SWIFT, who can answer that question. ...show more
It is important that asset managers are asked to measure their FX transactions against independent data to eliminate any accidental flattering of FX costs by managers. Once the costs are determined it is then a relatively simple task to begin managing them. The most important thing to recognise is that paying too much for FX, delivers no additional benefit for buyside firms whatsoever. It’s simply a drain on their portfolios. e-Forex spoke with Andy Woolmer, CEO of New Change FX, the award winning FX data company to learn more about measuring and managing FX costs....show more
It has become critical for increasing numbers of institutions across the FX market to have access to accurate market data to meet the growing focus on internal risk and control processes, regulatory compliance and the need to drive market analysis and profitable trading decisions. In today’s competitive FX landscape, gaining and rapidly actioning insight into execution quality and operational efficiency are seen as key to gaining a trading performance advantage. We asked Louis Lovas, Director of Solutions at OneMarketData to provide some perspectives....show more
Effective liquidity management - and in particular, the management of intra-day liquidity - is a high priority for banks. It’s also a focus for regulators. Why is this, and how can banks respond cost-effectively, compliantly, and above all in ways that enhance their competitive edge with clients? e-Forex went to Angus Scott, Head of Product, CLS Group, for the answers....show more
e-Forex talks to Dmitry Ilyaev, Head of eFX and Spot Trading at Commerzbank...show more
Seamless, end-to-end trading efficiency from front-end execution to back-office processing has been a core objective of all FX market participants for many years. Direct connectivity between platforms and FX risk managers is now a reality, thanks to recent innovation in APIs and the broad adoption of connectivity standards. These in turn have enabled FX pricing and transactions to be embedded directly within client workflows - so that even simple processes, from making payments to settling invoices all the way to complex balance-sheet management, can have embedded FX capabilities. But will today’s plethora of established technology providers in the eFX workflow space - delivering services including confirmation matching, aggregation, compression, reconciliation and settlement - be replaced by APIs and other new digital technologies? As innovation continues, are we close to real-time cross-border FX payments? e-Forex spoke to David Leigh, global head of FX spot and electronic trading at Deutsche Bank, to find out what the future holds....show more
Unlike the equity markets, post-trade processing in FX is disjointed. Multiple vendors and market infrastructures compete to message, match, confirm, aggregate, clear, net, credit-check, novate, compress, allocate, reconcile, settle and report trades. Legacy technologies and bespoking of services cause multiple reconciliations which necessitate high levels of manual intervention. As a result, costs and risks are indefensibly high. To discuss how to make post-trade more efficient, SWIFT invited a group of experts to an on-line discussion. Sam Romilly, head of FX new business development at SWIFT, shares with e-Forex what he learned from the discussion....show more
FX markets are unique not only in their scale but also in their complexity. There are multiple trading paradigms, and also multiple venues where trades may be executed. The FX eco-system is highly fragmented and the case for more automation – more automated FX-trade-lifecycle processes and procedures – has been clear for some time. And yet, automation hasn’t happened yet. Why not, and when will it happen? eForex spoke to Steve French, Head of Connectivity and Messaging for Traiana, about the challenges to automation, its benefits, and the key steps that firms should take on their journey towards implementing automation....show more
Where do we invest next? For FX-market participants working towards digital transformation, one of the simplest challenges is also the greatest: technology doesn’t stop evolving. The flagship investment of today might be the legacy system of the day after tomorrow. William Essex discusses the future-proofing of FX....show more
Crown Agents Bank (CAB) has been a trusted partner to frontier market central banks and financial institutions for decades with a unique expertise in these markets. Serving a wide network of partners across Africa, the Caribbean, parts of Asia and the Pacific islands CAB now offers a range of solutions encompassing foreign exchange, international payments, pensions and payroll payments and trade finance. We talked to Steven Marshall (Chief Commercial Officer) and Colin Digby (Head of Banks and Non-Bank Financial Institutions) at the firm to discover what factors are influencing the fast-developing payments landscape across the emerging markets (EM’s) and what role technology will be playing here in the future....show more
OTC Exchange Network (OTCXN) is a global liquidity aggregation and exchange platform for both digital and traditional assets. All trading, clearing, settlement and lending on their network is powered by proprietary blockchain technology which the firm developed specifically for institutional trading. We asked OTCXN’s CEO, Rosario Ingargiola to tell us more about this....show more
The FXTM brand was initially launched in 2011 with a vision to provide superior trading conditions, advanced education and state-of-the-art trading tools for the retail forex industry. Since then the company has grown rapidly around the world winning many awards along the way. Its client centric-business model has been successfully built around high standards of customer service and a continuous focus on tailoring its products to suit specific markets. e-Forex spoke with CEO, Nicholas Defteras, to learn more about how his firm operates and what makes it different from many others in the space....show more
As we approach the end of the second decade of the 21st Century, FX and Crypto trading continues to be a buoyant business sector. In this article the founder of mobile trading app specialist MTP LLP, Paul G. Smith, examines the current state of the art for mobile access to trading systems. There is no longer any question about whether or not a broker needs a mobile presence, the only question is - what should that mobile presence be? However, this article is not going to be so relevant to white label “broker in a box” scenarios, in which the micro-broker does not have any control over its operational or technical infrastructure....show more
Following recent announcements about the expansion of Gold-i’s development team, e-Forex spoke to Chris James, Chief Technology Officer at Gold-i to find out more about the innovative FinTech company’s current product development focus and future plans....show more
With over a decade having elapsed since the 2008 financial crisis, Natallia Hunik takes a look back over the past 10 years of the FX Prime Brokerage business and outlines why the growth of Prime of Primes looks set to continue....show more
In a digital age there’s no surprise that most our time is spent on smart phones. Smart phone statistics have rocketed over the past 5 years with now over 70% of people within the UK and USA owning a smart phone. Has the rise in accessible technology made it easier for retail Forex traders to trade or has it made it even more confusing? That’s what we’re here to tackle....show more
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