FastMatch, the electronic communication network for forex trading, has announced that it will open a new sales office in Greenwich, Connecticut, to add to their outlets in New York, London and Moscow. The move is in order to be located near to some of their major clients, including hedge funds and buy side firms which are relatively new for the company.
Dmitri Galinov, the CEO of FastMatch, explained: “We started growth via the sell side of the business, with non-banks, banks and brokers as participants. And as the market progressed with trading tools, we have asset managers and hedge funds that use the platform, though electronic methods of execution. At this particular moment we feel it’s important to have an office where important clients are based, and order flows are initiated, this will give us a leg up over our competitors.”
FastMatch may now consider Asia to be its next destination for further expansions, as the region’s forex markets have more potential for growth compared to Europe and North America. From an institutional FX business perspective, Singapore would be desirable, but there are also possible business opportunities in Hong Kong and Australia.
The Euronext connection
In an exciting development in May 2017, pan-European Exchange Euronext, bought a 90% stake in FastMatch for an initial fee of $153 million. This will strengthen FastMatch, as clients will feel more secure making transactions on their platform, due to the size and reputation of Euronext. FastMatch’s client base derives mostly from the United States, while Euronext is very strong in Europe.
Paul Humphrey, Head of Fixed Income, Rates and FX for Euronext, said: “As for the product offering at some point in the future, we may consider other avenues after we have growth in our market data franchises, with the forwards and NDF market. Euronext is well equipped to help FastMatch do that, clearly adding to their reach of resources. In contrast to some or our competitors acquiring an FX business, our customer bases are complimentary.”
As a burgeoning foreign exchange spot operator, FastMatch also announced the launch of their new innovation FX Tape in September, to serve as a central reference point for spot forex transacted prices. FX Tape will be tasked with publishing real time post trade data, to be collected from market participants in an aggregated fashion to minimize market impact.
The aim is that FX Tape will be a significant game changer, in that it will act as a vehicle to build a globally transparent foreign exchange market, which will be available to thousands of market vendors on a worldwide scale.
Mr Galinov explained: “There is really only 5 or 6% of the market where there is transparent data that can be called upon to make forex trade decisions. So the FX Tape would like to be a central referencing point in the market to analyse huge amounts of data, and for market surveillance. There are multiple uses for it. If I am a small commercial user, with FX Tape you would be able to view inter-bank charge rates and go back to your provider, which would improve the execution FX trade, this is a powerful move and has never been done before.”
“We started growth via the sell side of the business, with non-banks, banks and brokers as participants. And as the market progressed with trading tools, we have asset managers and hedge funds that use the platform, though electronic methods of execution.”
FX Tape will be a major priority for FastMatch throughout 2018, with a target in place for the tape to reach 100 yards. The second big push is to increase the synergies with Euronext, with a larger client base, and the rolling out of regulatory trade for traditional asset classes and distribution of market data.
With the prospect of expansion in Asia, it promises to be a busy year.