May 30, 2012

While traders, analysts and pundits are bracing for the potential impact of a Greek exit from the Euro zone, two players in the foreign exchange markets have released released platforms for FX trading today pointing to liquidity sourcing as a key feature.

Today, Tradition, the global interdealer broker in London announced traFXpure, a new electronic trading platform for spot FX, which the firm said is a low-cost, convenient and equitable venue for sourcing FX liquidity, open to all users on a fair and equal basis.

Among the key features of traFXpure are that it handles spot FX in CLS currencies and provides access to anyone who can settle via CLS. As for cost and convenience, it offers a standard FIX application programming interface with low cost and equivalent market data distributed to the entire market. In terms of fairness, it provides execution logic and uniform and transparent pricing which ensures fair execution for all, the company states. As for transparency, counterparties are fully disclosed on a post-trade basis. Major FX banks already supporting traFXpure include Barclays, BNP Paribas, Deutsche Bank, Royal Bank of Canada and UBS. Additional banks supporting the venture are expected to be announced over the coming weeks, according to Tradition.

“This initiative is designed to be easily accessible to all market participants with transparency a core benefit of the traFXpure platform,” commented Mike Bagguley, head of FX and Commodities at Barclays, in the release.

Commenting on the new platform, Zar Amrolia, global head of foreign exchange at Deutsche Bank, also said, “Deutsche Bank supports competition, innovation and transparency in the spot FX market. Reductions in trading costs and the provision of low cost market data will be of great benefit to our end-user clients.”

In addition, smartTrade Technologies also announced the launch of LiquidtyFX, a hosted spot FX liquidity aggregation, smart order routing and execution management platform. Aimed at regional banks, the Paris- and Aix en Provence-based company said its platform provides access to deeper liquidity, better prices, improved hit ratios, and reduced slippage.

“LiquidityFX was created to give regional banks a way to gain access to more liquidity and expand their FX businesses without having to build sophisticated FX aggregation and routing technology inhouse,” commented Harry Gozlan, CEO of smartTrade in the release. By offering a hosted solution, Gozlan said smartTrade can provide access to its liquidity management components at a lower-cost of ownership than if banks ran the system inhouse, said Gozlan in the company’s release. For example, LiquidityFX has connectors to more than 25 FX exchanges, ECNs and single bank platforms. In addition, it provides algorithmic routing strategies that improve execution quality while protecting relationships with liquidity providers and supplying best execution reporting features.

“We designed LiquidityFX to help traders improve execution results while protecting relationships with their liquidity partners,” comments Peter Atkinson, Head of FX Product Management at smartTrade, in the company’s release.

To address the fragmented nature of the FX market structure where pricing streams vary widely,” Atkinson said “LiquidityFX aggregates the pricing feeds and harmonizes the information, providing a real time view of the top of book and market depth while preserving the unique characteristics of the prices for use by the smart order router.”

Interestingly, Greenwich Associates released a whitepaper today saying that investors, analysts and companies are not "all concerned about how global foreign exchange markets would function amid a sudden breakup of one of the world’s major currencies." One of the key reasons for the lack of panic is technology and infrastructure. "Governments and market participants spent the better part of a decade preparing themselves and their systems for the introduction of the euro," according to Greenwich in its summary of the research findings.

ABOUT THE AUTHOR
Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in ...