DMALINK: The boutique electronic price discovery and execution venue

DMALINK is a boutique electronic price discovery and execution venue for professional FX traders streaming anonymous, proactively tailored and sustainable pricing with particular focus on Emerging Markets, Scandie crosses and CE3. We spoke with Founding Partner Michael Siwek to learn more about his firm and the products it offers.

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Michael Siwek

Michael, when was DMALINK launched and what are its core objectives?

DMALINK is a data-centric FX ECN founded in 2014 to address structural imperfections in the foreign exchange markets and resolve the governance and conduct issues raised by regulators. Our solution is multi-dimensional in that it offers a unique fee structure, it is emerging-markets centric and, most importantly, provides access to a benchmarked execution service based on independent reference rate data. We don’t believe that market makers should pay to trade with clients. Our fair and transparent industry-alignment is reflected in the fact that market makers do not pay brokerage fees to price the buy-side within the DMALINK ecosystem.  

Secondly, we believe the market can benefit from a trading venue focused on regional access to emerging market currencies, powered by a Tier-1 Central Counterparty. This type of specialised, client-aligned platform did not exist until 2014.  

Finally, we feel that clients and market makers can gain regulatory piece of mind, understand the real cost of execution taking into account slippage, market impact and other cost-related FX factors when using our benchmarked execution service. An aggregated and independent mid-rate, coupled with insightful market data, can help buy-side clients save considerable fees. The service enables bank market makers to demonstrate compliance to regulators.  DMALINK is built around access to transparency and fairness without the additional add-on costs. 

Please outline the range of products and services that DMALINK offers.

We offer execution, reporting, market data and benchmarked trading services focused around currencies and precious metals. We are in the process of adding NDFs in Q4 2021. 

What sort of clients are you providing these services for?

We service buy-side clients, including funds, asset managers, CTAs, corporates and regional banks. Our model is flexible, and we believe in going the extra mile to provide tailored solutions to clients with specific requirements. Our boutique-style approach to service is vital to clients and market makers in times of volatile market conditions.

You have said before that people are your greatest asset. Who are the key members of your executive team and what roles do they have within the firm?

Empires, nations and ideas rise and fall with its people. The same is true for businesses. We only hire people who share our passion for innovation and believe in the power of knowledge transfer amongst team members and the industry as a whole.

Manu Choudhary leads macro strategy across EMEA, expanding critical strategic partnerships and building out the product suite. Manu has over 16 years of front office derivative sales experience in the financial services industry. He joined us from Lloyds Bank in 2019, having worked at Barclays Investment Bank.

Ashwind Soonarane specialises in the formulation and implementation of strategic plans aimed at achieving innovation and competitive advantage. He further plays an instrumental role in the design and development of our proprietary technology.

Malkeet Sokhi has experience within the COO function and in delivering tangible results for front office executive management at the highest levels in several investment banks. He joined us recently to engage with banks on benchmarked-execution services, which helps compliance officers within financial institutions ensure that all foreign exchange trading aligns with current regulation. 

Chris Park is a financial services professional with 25 years of experience across leveraged/M&A financing, liquid asset financing, corporate banking, retail banking, capital/financial markets. He is helping our corporate clients to extract maximum value from the DMALINK solution. 

Please tell us a little more about your purpose-built EM FX trading and RegTech ecosystem and automated back-office infrastructure and what it’s been designed to do.

The purpose of project DMALINK is to enable fund and asset managers to gain visibility over currency hedging costs using independent reference rate data, ultimately improving the funds’ underlying investors’ net asset value. We believe investors can save multiple pips on each transaction. Our approach translates to a significant uptick in a funds returns over any given 12 months period. 

How do you leverage technology to deliver ultra-low latency solutions and how do your clients benefit from your on-going investment in it?

When DMALINK incorporated, we were acutely aware of the growing importance of data, and in 2017, as we had predicted, data became the most valuable commodity in the world. We keep investing in solutions to provide our clients with better insight into their trading. Further, we are developing tools to facilitate compliance with ever-evolving regulatory requirements. 

Where has DMALINK been looking to capture new opportunities in the fast evolving Digital Asset and Decentralised Finance space?

We believe focus is key to success. As such, DMALINK continues to focus on cash FX and precious metals. In 2020 central bank digital currencies (CBDC) moved from being a theoretical construct to actual development. This is interesting because it reveals the direction of travel moves towards tokenised representations of real-world assets.

We created a joint venture with WeOwn, a leading European blockchain company in response to this shift. Together, we launched DeFinity (www.definity.network). DeFinity aims to allow institutions to exchange conventional assets such as currencies, bonds, equities and commodities instantly and transparently in tokenised form using our proprietary blockchain underpinned by Tier 1 Bank custody services. We believe that digital assets and DeFi will redefine financial services. 

We are very bullish on the prospect. So are incoming investors who are presently in discussion with us to secure equity in DeFinity to future-proof their investment portfolios, balancing past and potential future losses resulting from Covid implications and knock-on effects to the broader economy globally. DMALINK users will immediately benefit from solutions introduced by DeFinity.

What plans do you have to broaden the international footprint of DMALINK and what does your product development roadmap look like for the coming year?

In addition to cash FX and precious metals, we are launching a data centre in Asia where clients will trade off-SEF NDFs. 

DMALINK has deep domain knowledge of FX so what do you think are the critical factors that trading firms need to consider to ensure the continuous and scalable success of their businesses?

Clients must continue to push the envelope to understand the actual FX trading cost on a given venue or with a particular counterparty. Market makers must ensure the technological ability to meet regulatory requirements. 

Trading firms will continue to be challenged by an ever-evolving regulatory landscape, especially when offering cross-border services. The key is not to resist but embrace regulation and use it as a stepping-stone to a more inclusive and fairer marketplace. Lastly, I feel that trading venues will have to align their fee schedules to ensure that participants are not double-charged.