Global FX markets are in transition, the catalysts include tougher regulation, higher capital costs and reductions in leverage ratios. As a result, we are seeing continued fragmentation of liquidity across primary venues, and reduction in risk appetite by banks who are scaling back on market making, leverage and appetite for risk warehousing (posi...
15 January 2017 Innovation in Financial Services
Interesting to see that Profit&Loss running a story that the US futures Exchange ICE may be preparing to buy our all three shareholders (Credit Suisse, BNY Mellon and FXCM) of FX platform Fastmatch for around $200m-$250m. As the FX market continues to fragment, and higher regulatory costs for bilateral trades start to bite, exchanges are no dou...
20 July 2015
The majority of single-dealer platforms (SDPs) – especially those of regional banks, provide mainly principal (rather than agency) based pricing to clients. That’s where the bank takes the other side of the trade (even if the bank covers the trades by back-to-back hedging with their liquidity providers), making their money on the spread, rather th...
13 July 2015
Hi David,
I don’t have access to the full Greenwich survey, so cannot comment on how they break down the catagories, and was anyway only commenting on the ‘teaser’ article they published.
But the full BIS Triennial survey is freely available, and their methodology (pg 44) has a category of FX execution method called “Electronic Trading Systems”, which is defines as “Executed via a single-bank proprietary platform (SDP) or a multi-bank dealing system (MDP) – and of course, includes FXAll along with Currenex and FXConnect. Another category of electronic method is Electronic Broking Systems, which covers EBS and Reuters Matching.
Within the BIS survey summary (here), it states that electronic methods of execution accounted for 34% of all FX trading (across spot, fwds, swaps and options), of which:
Broking Systems= 17% Multibank Trading Systems (MDPs) = 7% Single Bank Trading Systems (SDPs) =10%
Total Electronic Trading = 34%
So, that would mean that SDPs account for nearly 30% of all electronic trading, whilst MDPs accounted for 21%.
I could provide a similar breakdown of the Bank of England data if needed. As I said, it will be interesting to see what the 2010 BIS survey results will show!
Regards
Paul
14 May 2010 10:24 Read comment
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