Will CEP become a catalyst for competitive differentiation in FX?

As complex event processing (CEP) becomes increasingly popular as a tool for analyzing high frequency data in a latency driven trading environment, Nicholas Pratt examines whether CEP will become a catalyst for competitive differentiation in FX.

A sign of the growing importance of (complex event processing) CEP technology in the FX markets is the manner in which its use is expanding. Using CEP for liquidity aggregation and smart order routing has been a staple of the FX market for a number of years. More recently, the same CEP platforms have been used for pricing, auto-hedging and even full e-commerce where the aggregation is used not just as the basis for the FX bank’s internal trading but also as a service offered to its client base.   The latest area of interest for CEP platform users is pre-trade risk, says Ben Ernest Jones, solutions architect for capital markets, Progress Software. “This is not just for monitoring orders sent out to liquidity providers and fat finger checks but also for more complex risk checks on how a bank’s clients are interacting with its liquidity. Different banks do risk checks on their clients in different ways so there are some complex rules used.”  Internal order crossing is also...continued

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