FX Transparency ("FXT"), an independent provider of FX transaction cost analysis (TCA) and currency execution consulting, today announced the launch of its FXT Peer Benchmark™ program, an extension and evolution of its current suite of FX TCA services.
The firm has built a peer database of foreign exchange trades consisting of more than 60 investment managers and plan sponsors, totaling in excess of 500,000 transactions, and the numbers continue to expand.
"Knowing your cost to trade Brazilian Real in basis points is beneficial, but it's even more valuable to know how your execution costs compare to other institutional money managers," said James McGeehan, chief executive officer at FX Transparency.
Currency execution costs are under tremendous scrutiny due to recent legal action, and there is increased regulatory focus on OTC markets, where most currency trades are executed.
"As FX TCA becomes more common, we expect trading costs for the buy-side to move lower, much like we saw 25 years ago in the equity markets," said John Galanek, chief operating officer at FX Transparency.
The FXT Peer Benchmark™ program first compares a manager's trading history against the firm's database of mid-market spot and forward rates. The manager's aggregate costs in basis points are then compiled and compared to other manager's costs in the database and given currency -specific percentile rankings to show how they stack up against their peers.