Nicholas Pratt
Nicholas Pratt

Breaking track records with SDPs the Formula One trading platforms of FX

Nicholas Pratt looks at banks’ efforts to develop their SDP offerings and examines whether it is still possible to break new ground in this well established corner of the FX market.

The use of single dealer platforms (SDPs) among the top tier of liquidity providing banks has become well established and it is becoming an equally important channel to the regional banks that make up the tier below. However, competition between rival banks and from other alternative channels (traditional voice and multi-dealer platforms), continue to drive innovation among the SDP providers. Banks are responding to clients’ demands for a more complete trading experience with a more effective workflow that offers configurability but also takes into account some of the latest market developments in terms of regulation and central clearing as well as the growing interest in emerging market currencies. A key component in judging the success of SDPs in the FX market is comparing the volume of executions against that of multi dealer platforms (MDPs). The Bank of England’s semi-annual FX turnover survey results were published in July and showed that overall SDP volumes still exceed MDP volumes, $366bn...continued

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