ADS Securities LLC launches Prime-of-Prime offering

Tighter regulation, reduced risk appetite and the decline in the number of Prime Brokers (PBs) are affecting growth in the global FX market, according to ADS Securities. An estimated 25 per cent drop in available FX trading lines is leading to wider spreads, higher prices and increased foreign currency exposure for many participants.

Marco Baggioli In 2013 the average daily volume in the global market FX market was US$5.3 trillion (Bank of International Settlements – Triennial Survey), and estimates were for the market to reach US$6.5 trillion by September this year.  But as a result of the changed market dynamics, and with the scaling back of Foreign Exchange Prime Broker (FXPB) services, there may be little or no increase from the 2013 figures, if not a reduction.   Marco Baggioli, COO, at ADS Securities London, observes that: “A daily global FX industry credit gap potentially affecting as much as US$1.3 trillion in daily volume is extremely significant and is changing the overall balance of the market.  The lack of credit will lead to much wider spreads and increased pricing for all, from banks, to hedge funds, international businesses and all FX traders and, at the moment, no one is facing up to the problem.” He also says that,  “Two years ago a broker with US$5million capital...continued

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