In the past you have talked about the lack of execution flexibility that some clients still face. Please tell us more about what these challenges are and the problems they can create.
Our vision for Reactive Markets is to build a market utility that helps our clients optimise their OTC trading regardless of how they want to execute. We have 30 leading liquidity providers supporting spot FX, forwards, NDFs and FX Swaps, via streaming, RFQ and bank algos and everything is available over our low latency API, global UI and mobile app.
The Reactive Markets platform is designed from the outset to support the most latency sensitive systematic API clients to large globally distributed discretionary funds with hundreds of GUI users, and everything in between.
By creating a market utility that is open to all LPs which gives clients access to whatever they want to trade, however they want to trade it, we cater for a client’s current and future requirements giving them all of the flexibility that they need. Along with offering the full range of FX products and protocols to our clients, full execution flexibility can only be achieved by placing no limitations on the LP’s when it comes to customisation and bespoke pricing. In practice this means giving LP’s the ability to spin up bespoke pricing sessions for any given client or even down to a Strategy/PM/Desk level within a client. This means LP’s achieve an equivalent level of performance and flexibility through our network as they would via direct client connectivity, passing on these benefits to the end client in the form of tighter pricing and higher certainty of execution.
In what ways can solutions like your own, recently launched RFQ and Order Staging functionality, help to address the various issues?
Ultimately, this comes down to flexibility and giving each client complete discretion over how they execute a given order or group of orders. Supporting all products & protocols is one thing but the real value comes in allowing clients to access all products & protocols via any workflow the client deploys. These workflows range from full automation where clients execute Streaming, RFQ and Algo protocols via a single FIX API connection, to semi-automated workflows with rules based execution being overseen by human traders. Whilst RFQ is a large growth area for us, specifically in FX Swaps where the majority of transaction volume is still executed this way, we are now seeing Swaps as the last FX product to move to a streaming model. As more and more banks facilitate streaming Swaps, this presents a compelling offering to clients being able to enhance auto-hedging logic for Swaps and also trade passively targeting specific price levels against a stream.
How easy is it to integrate your RFQ service into any existing upstream and downstream trading processes?
One core principle of ours is that clients can access all asset classes, products and protocols via a single connection or channel (API, UI and Mobile). This means as we add new features such as RFQ, clients who are already integrated to our API for Streaming and/or Algo access can seamlessly add RFQ without requiring additional integration effort. This is true of both our upstream market data & trading API’s, but also our downstream STP and post trade give up API’s.
The Reactive Markets platform is designed from the outset to support the most latency sensitive systematic API clients to large globally distributed discretionary funds with hundreds of GUI users, and everything in between.
How would you describe the benefits of more proactive Liquidity Management and why is it fundamental to driving down execution costs and helping to create a more optimal execution experience?
Proactive liquidity management is at the heart of the Reactive Markets offering. Clients have access to detailed data around the performance of their LPs which forms the basis for healthy, open conversations with their LPs. These data driven discussions ultimately lead to direct pricing improvements in spreads and address performance issues such as higher than expected reject rates which can have significant trading cost implications.
Our experienced liquidity management team closely monitors our client’s liquidity and can advise on the addition of relevant LPs with niche strengths, such as regional specialists, could positively impact the clients liquidity pool. Together this proactive liquidity management results in tighter pricing and better execution and a significant number of our clients reap the benefits of outsourcing this to our specialist team.
Proactive liquidity management is at the heart of the Reactive Markets offering. Clients have access to detailed data around the performance of their LPs which forms the basis for healthy, open conversations with their LPs.
Of course, liquidity management is only half of the story and being able to take swift actions after data driven decisions is just as important. For this you need a technology provider that has access to a wide range of LPs and has the flexibility to quickly add new LP streams. We now have 30 liquidity providers on our platform pricing spot, forwards, NDFs and Swaps. Our ultra low latency platform enables us to remove constraints from LPs pricing so we support an unlimited number of pricing sessions for the LP. Consequently, we can run a truly bespoke pricing offering for each of our clients and can confidently curate, maintain and optimise the most cost effective liquidity pool for them.
