e-Forex-May-23

transforming global foreign exchange markets 

e-FOREX 

e-forex.net MAY 2023 

MARKET COMMENTARY 

What’s powering the evolution 

of P2P FX platforms? 

REGIONAL PERSPECTIVE 

The Nordics look towards more 

sophisticated e-FX solutions 

FX ECNs 

A bright future for those willing 

to grasp the opportunities 

DIGITAL ASSETS 

What lessons can be learned 

from the evolution of 

electronic FX trading? 

PLATFORM REVIEW 

Bloomberg FXGO 

expands execution 

and workflow suite 

COVER INTERVIEW 

TOM SAN PIETRO 

CEO OF FXSPOTSTREAM 

LIQUIDITY • RISK MANAGEMENT • STP • E-COMMERCE

CitiVELOCITY 

VELOCITY 3.0 

ACCESS CITIFX FROM ANYWHERE 

Our next generation, web-based FX trading platform brings 

all our capabilities together on desktop, web & mobile. 

Contact your FX esalesperson to learn more 

100+ 

PLATFORM 

AWARDS 

12 

PATENTS 

e for education 

$66.9M 

RAISED 

© 2023 Citigroup Global Markets Inc. Member SIPC. All rights reserved. Citi Velocity, Citi Velocity & Arrow Design, Citi, Citi with Arc Design, Citigroup and CitiFX are 

service marks of Citigroup Inc. or its subsidiaries and are used and/or registered throughout the world. This product is offered through Citibank, N.A. which is authorised 

and regulated by the Financial Conduct Authority. Registered Office: Canada Square, Canary Wharf, London E14 5LB. FCA Registration number 124704. VAT Identification 

Number GB 429 625 629. Citi Velocity is protected by design and utility patents in the United States (9778821, 9477385, 8984439, D780,194, D780,194, D806,739) and 

Singapore (30201501598T, 11201505904S), and design registrations in the EU (0027845156-0001/0002, 002759266-0001). 

2 MAY 2023 e-FOREX

Welcome to 

e-FOREX 

transforming global foreign exchange markets 

May 2023 

Our Market Commentary article in this edition focuses on the P2P 

model in FX. We start off by exploring the various benefits that 

Peer-to-Peer trading can deliver for buyside firms, for example in 

helping to minimize market impact by matching against opposite 

buy-side interest. We then look at the steps being taken by providers 

to reduce any disruptions firms might face when incorporating P2P 

in their trade workflows. Finally we examine some of the advantages 

that bringing banks into the P2P picture can bring and what the 

arrival of Peer-To-Peer-To-Bank services may mean for the market. 

Technology has facilitated Peer-To-Peer matching so as the FX 

market continues on its journey of electronification there are many 

compelling reasons why buyside firms should consider P2P as a 

useful addition to their execution toolkits especially for predictable 

trades, like rolling passive hedges 

Despite recent industry surveys indicating a decline in the volume of 

trades executed via some ECNs this is not the case for all venues so 

in this edition we report on why the value of the ECN proposition 

still remains strong and compelling for many FX market participants. 

Efforts are now underway by some leading ECNs to make their 

services even more attractive, for example by adopting the FX Global 

Code, developing new technology, providing multiple sources of 

liquidity and expanding their product range. It will therefore be 

interesting to see what impact all these have had on the trading 

volumes of these platforms in a few months time. 

When discussing the Institutional Digital Asset marketplace many 

commentators are drawing parallels with how the FX market has 

evolved but are predicting much faster progress, especially with 

respect to the deployment of electronic trading services and the 

various technologies associated with it. We therefore report this 

month on how this fast growing industry has the opportunity 

to learn from the many mistakes and challenges of both the 

institutional FX and retail markets and what it’s going to take for it to 

achieve its full and exciting growth potential. 

A final note about this months e-Forex Supplement which will be 

available in early June. This is focused on how buyside and sellside 

firms can unlock the potential and exploit the full benefits of FX 

Clearing. 

Susan Rennie 

Susan.rennie@sjbmedia.net 

Managing Editor 

Charles Jago 

charles.jago@e-forex.net 

Editor (FX & Derivatives) 

Charles Harris 

Charles.harris@sjbmedia.net 

Advertising Manager 

Ben Ezra 

Ben.ezra@sjbmedia.net 

Retail FX Consultant 

Michael Best 

Michael.best@sjbmedia.net 

Subscriptions Manager 

David Fielder 

David.fielder@sjbmedia.net 

Digital Events 

Ingrid Weel 

mail@ingridweel.com 

Photography 

Charlie Dewey 

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Web Manager 

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Please note, the publishers do not endorse or recommend any specific website 

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The entire contents of e-Forex are protected by copyright and all rights are 

reserved. 

As usual I hope you enjoy reading this edition of the magazine. 

Charles Jago, Editor 

MAY 2023 e-FOREX 3

CONTENTS 

May 2023 

CONTENTS 

Vivek Shankar 

P2P trading 

Tom San Pietro 

e-Forex interview 

Nicholas Pratt 

ECN platforms 

Oleg Shevelenko 

Platform Review 

Niels van Daatselaar 

Product development 

Jenna Wright 

Crypto exchanges 

MARKET 

COMMENTARY 

14. Improving Execution 

Outcomes: How bright ideas 

and cutting edge technology 

are powering the evolution of 

P2P FX 

Vivek Shankar investigates how 

Peer-to-peer (P2P) trading has been 

evolving. 

REGIONAL E-FX 

PERSPECTIVE 

22. The Nordics: A region where 

demand for digital FX services 

is now focused on more 

sophistication through proven 

technology 

Vivek Shankar explores discovers 

more about the growth of digital 

FX services across Scandinavia. 


32. Bloomberg FXGO expands 

execution and workflow suite 

We review some of the latest 

developments to the FXGO 

platform and assess how this 

expansion reflects the changing 

execution needs of Bloomberg’s 

clients. 

EXPERT OPINION 

34. FX Automation: Pushing 

Boundaries 

Sebastian Hofmann-Werther 

teases out some of the nuances 

associated with automated trading 

solutions in FX. 

E-FOREX INTERVIEW 

36. With Tom San Pietro, CEO of 

FXSpotStream 

RISK MANAGEMENT 

44. The devil is in the detail: shining 

a light on FX Settlement Risk 

Keith Tippell outlines some of the 

work being done by CLS and steps it 

is taking to meet the challenges of FX 

Settlement Risk. 

PRODUCT 

DEVELOPMENT 

46. Harnessing Technology: Taking 

the risk out of FX Risk Management 

for E-commerce players 

Niels van Daatselaar looks at what 

strategies banks can adopt to improve 

their single bank FX propositions. 

SPECIAL REPORT 

50. The USPs of FX ECNs: 

Product diversity, flexibility and 

customisation help them to 

remain a compelling proposition 

for many market participants. 

Nicholas Pratt examines why the future 

of FX ECNs remains bright for those 

willing to grasp the opportunities 

VIEWPOINT 

56. What steps are crypto exchanges 

taking to meet the needs of 

institutional traders and investors? 

e-Forex spoke with Jenna Wright, 

Managing Director, LMAX Digital to 

discuss some of the issues. 

DIGITAL CURRENCIES 

58. Institutional digital assets: 

What are the evolutionary lessons 

from e-FX? 

Andy Webb talks to three prominent 

industry practitioners to gain their 

insights on how institutional digital 

assets will evolve. 

COMPANIES IN THIS ISSUE 

A 

Acuity 

B 

BidFX 

Bloomberg 

C 

Centroid Solutions 

Citi 

CLS 

CurrencyNode 

Curex 

Cypator 

p10 

p27 

p32 

p61 

IFC 

p31 

p51 

p14 

p8 

D 

DeFinity Markets 

DIGITEC 

E 

Euronext 

F 

Finalto 

FXCM 

FX Hedgepool 

FXSpotStream 

G 

GCEX 

p48 

p10 

p54 

p13 

p19 

p16 

p9 

p12 

I 

Integral 

IPC 

L 

LMAX Digital 

LoopFX 

N 

Nordea 

O 

oneZero 

Options Technology 

P 

PLUGIT 

p59 

OBC 

p56 

p21 

p24 

p16 

p6 

IBC 

Q 

QubeAlgo 

R 

Refinitiv 

S 

SEB 

SG-Forge 

SGX 

smartTrade Technologies 

Swissquote Bank 

T 

360T 

ThinkMarkets 

TreasurUP 

p6 

p11 

p25 

p8 

p53 

p5 

p7 

p34 

p10 

p46 


Order 

Management 

System 

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smartTrade Technologies provides end-to-end liquidity sourcing, trading, 

payments, and distribution capabilities across multi-asset class instruments. 


Bloomberg launches Hosting Solution for 

Asia FX clients 

Bloomberg has launched its Asia-Pacific 

regional hosting solution in Singapore, 

greatly improving FX pricing and trade 

negotiation on its multi-bank FXGO 

trading platform. Low-latency hardware 

and software optimizations implemented 

in Singapore have optimized pricing by 

major international and regional liquidity 

providers, improving best execution and 

reducing transaction costs for regional 

FX market participants. Several major 

international investment banks have 

already connected to the solution in 

Singapore, delivering an enriched FX 

trading environment for clients and 

helping to contribute to the growth and 

development of Singapore as an APAC 

center of FX liquidity distribution. “We 

are pleased to be supporting the region’s 

FX community by consistently deploying 

cutting-edge technology in areas that 

matter most to our clients,” said Tod 

Van Name, Global Head of FX Electronic 

Trading at Bloomberg. “We cannot 

underestimate the growth potential of 

FX trading in the Asia-Pacific region, 

especially as trading electronically 

continues to gain momentum.” He 

Tod Van Name 

added, “We will continue to invest 

in additional solutions that will bring 

greater operational efficiencies 

and transparency for our global FX 

community.” 

QubeAlgo being rolled out to broader market 

NEWS 

QubeAlgo, which has been live with 

a select group of clients, is now being 

rolled out to the broader market, 

providing highly customizable solutions 

that empower quants and developers 

to build bespoke, multi-asset, electronic 

trading applications, often with minimal 

code.QubeAlgo’s asset-agnostic software 

(Qube) is designed to significantly speed 

up development of complex e-trading 

applications, making it much easier 

and more cost-effective to develop, 

test, and deploy sophisticated e-trading 

models and algorithms. Co-founders 

Martin Zinkin and Jeff Leal have spent 

their careers building award-winning 

quantitative and algorithmic trading 

frameworks inside top-tier investment 

Martin Zinkin 

banks, laying the foundation for the 

launch of QubeAlgo. “We’ve built similar 

solutions to Qube at our previous firms, 

and now in its 5th generation, it is even 

more powerful than its predecessors,” 

says Zinkin. “We’ve spent a lot of time 

over the years on low level technology, on 

build and deployment issues, data and 

environment, and cumbersome testing 

processes. We had a vision of a system 

that would allow quants and developers 

to be much more productive and allow 

them to focus instead on models and 

business logic.” 

KX and Options Technology partner 

KX has nnounced a new partnership 

with Options Technology, a leading 

provider of capital markets services 

and market data. Together, the two 

companies will create a cloud-based, 

market data analytics platform that will 

deliver enhanced trading outcomes for 

clients. Through this partnership, KX 

will utilize Options’ extensive market 

data footprint to enhance the analytics 

platform, providing clients with realtime 

and historical insights. Options 

will provide KX with access to its vast 

repository of market data, including 

Equities, FX, Futures, Options, and Fixed 

Income data, as well as advanced market 

data analytics tools. “Our partnership 

with KX marks a momentous occasion 

for Options Technology and the financial 

services sector as a whole,” said Danny 

Moore, President and CEO of Options 

Technology. “The integration of our 

market data and analytics solutions with 

KX’s market-leading time series database 

and Data Timehouse technology will be 

a game-changer, providing clients with 

unparalleled insights and enabling them 

to make informed trading decisions in 

real-time.” 

Danny Moore 


Institutional 

EMBARK POWERFUL 

LIQUIDITY SOLUTIONS 

Combine power and tailor-made for best-in-class execution on FX Spot, Metals, 

Swaps, Forwards and Commodities. With a deep liquidity pool, custom streams, 

a hybrid execution model and the best trading environments, you are ready to 

expand your counterparty network. 

Partner with the Swiss leader in online banking (SIX:SQN). 

swissquote.com/fx-prime 


Institutional trading ECN Cypator is launched 

Cypator a crypto trading Electronic 

Communication Network has 

announced that it is live with multiple 

institutional participants utilizing 

the platform to trade crypto spot 

transactions. Cypator is also live with 

prime broker Hidden Road, which 

acts as a counterparty to all trades 

and facilitates both the credit risk and 

settlement of the transactions. With 

Cypator’s relationship with Hidden 

Road, the market has opened to 

indirect credit relationships enabling a 

much larger trading ecosystem. 

“As an experienced team we looked at 

the crypto market and identified a gap 

in the trading liquidity infrastructure. 

We can now provide our clients with 

a counterparty who is willing to take 

on the risk and for a complementary 

trading solution which leverages that 

to enable all players to trade with 

each other in a seamless manner. With 

Hidden Road we found a best of breed 

prime broker who is focused on being 

a ‘true’ prime broker while we will 

Ayal Jedeikin 

focus on providing the best institutional 

grade trading solution,” said CEO and 

Founder Ayal Jedeikin. 

SG-FORGE launches the EUR CoinVertible 

stablecoin 

NEWS 

SG-FORGE, a fully integrated and 

regulated subsidiary of Societe Generale 

group dedicated to digital assets, has 

launched the EUR CoinVertible, a digital 

asset that purports to maintain a stable 

value (stablecoin). EUR CoinVertible 

is deployed in Euro denomination on 

the Ethereum public blockchain (ticker 

code: EURCV). This pioneering project 

is designed to bridge the gap between 

traditional capital markets and the 

digital assets ecosystem based on the 

CAST open-source interoperability 

and securitization framework. Jean- 

Marc Stenger, Chief Executive Officer 

at SG-FORGE said: “Digital assets 

with stabilisation mechanisms – i.e. 

stablecoins – built under a robust 

banking-grade structure will be a key 

element to increase trust and confidence 

in the native crypto ecosystem. This 

issuance is a major step in Societe 

Generale–FORGE’s roadmap to deliver 

innovative solutions to its clients, either 

real-money institutions and corporates 

or entities of the crypto industry, and to 

facilitate the emergence of new market 

infrastructures based on blockchain 

technology.” 

Jean-Marc Stenger 

Match-Trader completes integration to 

Centroid Bridge 

The Match-Trader platform has integrated 

with Centroid Solution’s Bridge Engine, 

an institutional-grade connectivity 

solution, thus expanding its ecosystem of 

connectivity, order routing and execution 

functionality available for brokers. Match- 

Trader is available in two offerings: as 

a White Label and as a Broker’s Own 

Server. Clients can choose from a wide 

range of built-in apps, e.g. Social and 

Copy Trading solutions, Client Office, 

and Integrated Payments, which can be 

customised according to their needs to 

increase the potential of their business. 

“With this collaboration, I believe we 

can help our clients in building the most 

sophisticated and flexible brokerage 

setups they require to succeed in our 

ever-changing and innovative market. 

To this extent, we are also planning as a 

next step to integrate our flagship Risk 

Engine with the Match-Trader Platform” 

said Cristian Vlasceanu, Chief Executive 

Officer at Centroid Solutions. 

Cristian Vlasceanu 


Evolving with the Market 

Added Functionality to Support Algos & Allocations Now Live 

® 

GUI 

Live 

RFS 

Functionality 

Added 

London 

& Tokyo 

Offices Open 

FX|Insights 

Analytics Tool 

Launched 

USD11T 

Supported 

for 2020 

FX Spot 

Streaming 

Only 

FX Fwds, 

Swaps Added 

Streaming 

Precious 

Metals Added 

NDF/NDS, 

PM Swaps 

Added 

Total Reaches 

15 LPs 

Algos & 

Allocations 

Functionality 

Added 

® 

FXSpotStream is a bank owned consortium operating as a market utility, providing the infrastructure 

that facilitates a multibank API and GUI to route trades from clients to LPs. FXSpotStream provides a 

multibank FX streaming Service supporting trading in FX Spot, Forwards, Swaps, NDF/NDS and 

Precious Metals Spot and Swaps. Clients access a GUI or single API from co-location sites in New York, 

London and Tokyo and can communicate with all LPs connected to the FSS Service. Clients can also 

access the entire Algo Suite of the FSS LPs, and assign pre- and/or post-trade allocations to their 

orders. FXSpotStream does not charge brokerage fees to its clients or LPs for its streaming offering. 

Algo fees from an LP are solely determined by the LP. 


DIGITEC acquires Modular FX 

DIGITEC, the provider of D3, the 

Multi-Asset Pricing Engine and the 

DIGITEC/360T Swaps Data Feed 

(SDF), has announced the successful 

acquisition of Modular FX, the 

specialist provider of electronic trading 

technology and consulting services. As 

part of the acquisition the Modular FX 

Directors have joined DIGITEC. Stephan 

von Massenbach joined DIGITEC as 

Chief Revenue Officer in 2021, and 

Howard Grubb joined as Product Lead 

for electronic trading in July 2022. 

“The FX Swaps market continues to 

evolve at pace. The most recent BIS 

Triennial Survey showed that FX Swaps 

increased to 51% of all FX volume, 

driven largely by automation and the 

further development of electronic 

markets,” said Peer Joost, CEO of 

DIGITEC. “As FX Swaps technology 

specialists we continue to invest in our 

services and enhance our electronic 

pricing and data products as demand 

for electronic trading increases. Howard 

and Stephan’s market and technical 

Peer Joost 

experience helps us to address the 

rapidly evolving needs of our clients 

head on.” 

ThinkMarkets partners with Acuity Trading 

NEWS 

ThinkMarkets, the multi award-winning 

global online trading provider has 

announced a new strategic partnership 

with AI pioneers, Acuity Trading. The 

latest collaboration integrates Acuity 

Trading’s Signal Centre tools directly into 

the ThinkMarkets trading ecosystem, 

enabling traders to save valuable research 

time by receiving up to 40 high-quality, 

real-time trading signals each day, 

compiled by experienced technical 

analysts and innovative AI-based market 

data analysis. These signals will be 

delivered to traders before the markets 

open, allowing them to plan their 

strategies in advance and make informed 

trading decisions. The signals will also 

come with entry, exit, and stop loss 

levels; empowering traders to implement 

their strategies with confidence. Andrew 

Lane, CEO of Acuity Trading, commented, 

“We are delighted to be partnering with 

ThinkMarkets, a leading global online 

trading provider. This partnership will 

allow us to offer our innovative analytics 

platform to ThinkMarkets’ clients, 

providing them with a valuable tool to 

help them make more informed trading 

decisions. We believe that this partnership 

will be mutually beneficial, and we look 

forward to working together to help 

traders succeed.” 

Andrew Lane 

Grupo Bursátil Mexicano selects Integral 

Grupo Bursátil Mexicano (GBM), the 

leading Mexico-based brokerage firm 

with over US$25.8 billion AUC, has 

selected Integral’s cloud-based SaaS FX 

technology to empower their growth 

strategy in Mexico. Integral was awarded 

this deal in a competitive process with 

other technology vendors and represents 

another important SaaS partnership in 

Latin America as part of Integral’s global 

growth strategy. For GBM, Integral’s 

FX technology solution provides direct 

liquidity connectivity, a sophisticated 

pricing engine, and complete risk 

management capabilities. The solution 

enables the broker to support both voice 

dealing and fully electronic workflows 

in modern branded user interfaces. As a 

result, GBM will be able to scale to service 

its growing customer base and address 

new market segments. “This agreement 

demonstrates Integral’s global presence 

as a leading currency technology partner, 

supporting advancements in FX trading in 

the Latin American region,” added Harpal 

Sandhu, CEO, Integral. “Our cloud-based 

SaaS offering is well suited to support 

GBM’s growth, benefitting from an FX 

workflow that is fully automated and 

highly configurable, spanning across the 

entire trading lifecycle to deliver better 

outcomes for their customers.” 

Harpal Sandhu 


TRADE SMARTER, 

FASTER AND 

SAFER 

Refinitiv’s desktop software, trading venues, data platform and post-trade 

solutions empowers you to establish and operate a full FX trading franchise, 

while equally supporting your clients and partners across your network. 

Choose the FX trading ecosystem that powers the global FX community. 

And make every trade count. 

refinitiv.com/fx 

Refinitiv, an LSEG (London Stock Exchange Group) business, is one of the world’s largest providers of financial markets data and infrastructure. With $6.25 billion in 

revenue, over 40,000 customers and 400,000 end users across 190 countries, Refinitiv is powering participants across the global financial marketplace. We provide 

information, insights and technology that enable customers to execute critical investing, trading and risk decisions with confidence. By combining a unique open platform 

with best-in-class data and expertise, we connect people to choice and opportunity – driving performance, innovation and growth for our customers and partners. 

An LSEG Business 

RE1370648/3-21 


GCEX launches new proprietary 

trading platforms 

GCEX Group enables institutional clients to access deep liquidity in digital assets, digital 

assets as collateral and conversion as well as a broad range of FX brokerage and technology 

solutions. The firm recently released XplorDigital trading solutions, which now include two 

new best-in-class and intuitive trading platforms: XplorSpot and XplorTrader. We asked Lars 

Holst CEO of the company to tell us more about these platforms and how they will help 

brokers, fund managers, hedge funds and professional traders to operate more efficiently. 

NEWS STORY 

What type of firms will benefit 

from your new proprietary cryptonative 

platform XplorSpot and how 

has it been designed to meet their 

crypto-specific requirements? 

Brokers, fund managers and professional 

traders serious about crypto spot trading 

will benefit from our proprietary cryptonative 

platform, as standalone or as 

part of Xplor Crypto-in-a-Box Solution. 

XplorSpot supercharges the on-ramp 

and off-ramp of digital assets. Designed 

on par with traditional finance, leverages 

decades of experience building cuttingedge 

technology. Highlights of this highperformance 

platform include built-in 

charts, a risk view, a real-time view of 

positions as and when you trade, and 

automations expected from a traditional 

finance platform - although more 

features are added every month. Focus 

has been on taking our clients’ trading 

experience to the next level, making 

XplorSpot easy to navigate, easy to use 

and easy to execute. 

You have also enhanced your 

margin-based CFD and FX offering 

with the introduction of XplorTrader. 

Please tell us about some of the key 

improvements GCEX has made to 

this high-performance platform and 

the benefits it will deliver. 

XplorTrader is a high-performance 

margin-based platform that also 

enhances the user experience with 

a more intuitive and easier-to-use 

platform. Users continue to monitor 

positions, place orders, maintain 

platform depth, detail and functionality 

while it allows users to build their own 

UI as part of our Xplor Broker-in-a- 

Box. Overall, it meets the requirements 

from an institutional trader, investing 

in margin-based products, with fast 

executions, advanced order types 

and real time risk management. 

Furthermore, we will continue to 

enhance the platform with additional 

features. 

XplorSpot and XplorTrader 

form key components of GCEX’s 

XplorDigital trading solutions - 

‘Crypto-in-a-Box’ and ‘Broker in-a- 

Box’ plug-and-play solutions. What 

wide range of services do these 

now offer? 

Both turnkey solutions are extremely 

flexible and modular enabling the 

growth of our client’s own brand. 

Either access our liquidity offering or 

add your own liquidity sources, choose 

our trading and backoffice solutions or 

yours. They satisfy almost any user. 

Xplor Broker-in-a-Box include 

everything to run your brokerage: 

interbank liquidity offering, monitoring 

trade data instantly, monitoring and 

managing aggregated liquidity in 

real-time, easy risk monitoring, APIs 

integration, best-in-class connectivity, 

hosting, allocation, analytics and 

backoffice solutions. Xplor Cryptoin-a-Box 

is perfect to run your own 

exchange accessing our global expertise 

in digital assets, regulated custody and 

staking solutions, and a technologyagnostic 

platform that covers tier 1 

liquidity. 

Why is adding a crypto-native 

platform to your technology 

offering so significant for GCEX and 

what can we expect to see next in 

the ongoing development of your 

institutional trading solutions? 

Delivering XplorSpot demonstrates our 

ongoing commitment to the crypto 

space and confidence in our longterm 

strategy despite recent noise and 

volatility. GCEX is committed to investing 

where there are opportunities for 

growth which is why we have pursued 

a Virtual Asset Service Provider License 

for the MVP phase by VARA (Dubai). 

Future developments for institutional 

trading solutions cover continuing to 

enhance customer experience and 

journey, followed by adding more 

value to customers through technology 

partnerships across the industry - as 

recently done increasing our digital 

assets solutions with regulated custody 

and staking solutions – with more 

innovative collaborations coming soon in 

our pipeline. 


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Vivek Shankar 


Improving Execution 

Outcomes: 

How bright ideas and cutting edge 

technology are powering the 

evolution of P2P FX 

FX market participants have long contended with information leakage impacting trade 

outcomes. Peer-to-peer (P2P) trading, originally an antidote to this problem, has evolved 

significantly to offer additional benefits to market stakeholders. Vivek Shankar investigates. 

P2P service providers list benefits such as 

minimizing costs, tracking error reduction, 

and boosting strategic trading as benefits 

of the model. However, some deficiencies 

remain. Detractors point to P2P’s inability 

to replicate bank risk warehousing 

abilities when markets experience strong 

directional moves. For example, LoopFX 

has recently launched a dark pool that 

follows a peer-to-peer-to-bank model in 

response to these events, believing the 

traditional P2P model needs an overhaul. 

So, how are P2P service providers 

addressing these needs, and what form 

could P2P shortly take? 

GAINS FOR THE BUY-SIDE 

“The most important advantage that 

the buy-side gains is the opportunity to 

minimize market impact by matching 

against opposite buy-side interest,” says 

James Singleton, Chairman and CEO at 

Cürex. “Saving spread by matching at a 

midpoint is a nice additional feature but 

not the real value driver,” he adds. 

P2P’s ability to match buy-side interests 



Image by Shutterstock 




“P2P liquidity is a potential additional liquidity source with 

tremendous benefits.” 

James Singleton 

levels the playing field, irrespective of 

the kind of trade involved. When asked 

about the broad advantages P2P offers 

market participants, Jay Moore, CEO and 

co-founder of FX HedgePool, concurs 

with Singleton’s observations and adds 

that some instruments benefit more 

than others. 

“Take swaps for example,” he says. 

“Swaps are the largest part of the 

largest capital market in the world and 

volumes have grown in large part due 

to the increased demand for passive 

hedging from everyday investors. Unlike 

reactionary spot trading, passive hedging 

generates predictable, recurring, and 

directionally consistent swap volume 

that most of the market knows is 

coming – making swaps arguably the 

most vulnerable orders in the market 

with the most to gain from peer-topeer 

trading. Recycling this type of 

benign liquidity through the market 

unquestionably creates excess costs 

that are ultimately borne by investors. 

FX HedgePool brings the natural 

partners together to avoid that.” 

One of P2P’s underrated advantages 

for buy-side desks is its ability to 

slot into operational workflows. For 

instance, P2P effectively automates 

operational trades, freeing up a 

trader’s time to focus on strategically 

important positions in a portfolio. With 

some venues offering fully electronic 

execution, buy-side desks can now 

potentially automate their operational 

trades, using P2P as a liquidity 

source. “The use of algo execution is 

becoming more and more prominent 

with the buy side,” Singleton explains. 

“Once an FX trader understands and 

adapts to the advantages of “slicing” 

an order, he or she can then determine 

which liquidity sources to incorporate 

in that execution, including a peer-topeer 

pool if available.” 

When asked about incorporating 

algo-based execution, Singleton says, 

“Our platform delivers the advantages 

of electronic execution - execution 

speed, anonymity, no last look, and 

low market impact - without the 

disadvantages of other ECNs - last look 

and risk of information leakage.” 

Continuing the algo adoption theme, 

Moore notes that P2P adoption is 

increasing since it fulfills many of the 

same requirements traders demand 

off algos. P2P delivers benefits such 

as streamlining operational trades 

and automating non-strategic trade 

execution, mirroring the ones that 

algos originally offered. 

“Just as algos have become a 

standard tool for today’s traders, P2P 

is emerging as a standard “first stop” 

for much of tomorrow’s liquidity,” he 

says. “In our experience, it’s the same 

traders who embraced algos early are 

the same ones who are embracing 

P2P.” 

SUPPORTING BEST EXECUTION AND 

TRANSPARENCY 

“Best execution” is relative in FX. 

Despite different definitions, almost 

every buy-side trader agrees that 

achieving it is challenging. Information 

leakage and establishing a pattern 

that LPs recognize before execution 

impacts prices, thanks to pre-hedging. 

While the GFXC’s paper on the subject 

addressed the issue, the problem 

persists. 


One of P2P’s underrated advantages for buy-side desks is its ability to slot into operational workflows 

Moore points out that information 

leakage, or any form of predictability, 

creates an adverse market impact 

for the buy-side. “No matter how 

carefully managed, whenever there is 

predictability, there is market impact,” 

he says. “The challenge, and perhaps 

why many choose to ignore the 

problem, is that market impact is not 


Improving Execution Outcomes: How bright ideas and cutting edge technology are powering the evolution of P2P FX 


“Just as algos have become a standard tool for today’s 

traders, P2P is emerging as a standard “first stop” for much of 

tomorrow’s liquidity,” 

Jay Moore 

captured in the “point-in-time” TCA 

that the market currently relies on to 

demonstrate best execution.” 

“Peer-to-peer takes the market 

impact challenge off the table by 

removing all information leakage and 

the hazard of pre-hedging from the 

equation entirely,” he continues. “This 

makes P2P a tool that every buy-side 

trader should have in their tool kit, 

particularly for predictable trades, like 

rolling passive hedges.” 

Singleton concurs with this view 

and notes that match rates cannot 

be manipulated since traders can 

compare them to benchmarks. In 

essence, Moore and Singleton say, P2P 

is changing the conversation around 

best execution. 

In addition, P2P is also impacting 

operational workflows in FX 

significantly. Moore highlights the 

issues traders face with swaps tied to 

passive hedge positions and how FX 

HedgePool’s P2P community is solving 

them. 

“These trades are considered 

routine, non-alpha generating and, 

by definition, create predictability, 

operational risk, and cost,” he says. 

“A buy-side trader’s job is to minimize 

each of these effects by being discreet, 

efficient, and diligent with their LPs. 

All of this effort simply to survive 

another day and do it all again the 

next month. By joining our community 

of passive hedgers, they can find 

dependable, natural offsets for their 

routine hedging needs.” 

He explains that traders can 

consistently and anonymously 

book jumbo swap trades on a 

single ticket against a community 

of peers, ensuring zero market 

impact. FX HedgePool participants 

match at mid-market rates at 

fixed fees, eliminating any tedious 

negotiation for routine trades while 

avoiding volatile spreads they might 

otherwise receive from LPs. 

“Routine, passive trades detract from 

the strategic benefits of the buy- to 

sell-side relationship where market 

risk management is so essential. Our 

goal is to create more space for traders 

to focus on the trades where their 

expertise is needed most,” Moore 

concludes. 

INCREASING ACCESS AND UNIQUE 

SERVICES 

While P2P’s benefits offer compelling 

use cases, ease of onboarding and 

access are critical to greater adoption. 

To this end, Singleton and Moore 

highlight their efforts in minimizing 

any disruptions traders might face 

when incorporating P2P in their trade 

workflows. 

“When Cürex was designing its 

peer-to-peer matching platform, 

we consulted with our largest 

buy-side customers to make sure 

we were building a product that 

addressed their principal concerns,” 

Singleton says. “We worked with 

those institutions’ banks to address 

credit issues related to P2P matching. 

Our solution, which also addressed 

important workflow concerns, relied 

on the algo providing banks to access 

our P2P platform on behalf of those 

buy-side institutions.” 

Singleton notes that Cürex is working 

on expanding beyond the seven 

participating algo banks it currently 

has on board. “We view this as a winwin 

situation where we bring more 

customer access to our P2P platform 

and the participating algo banks 

provide an additional and attractive 

liquidity pool for the same fee they are 

charging their clients,” he says. 

FX HedgePool, Moore says, has 

focused on workflow automation and 

integration over the past year. “Our 

efforts have led to fully integrated and 

automated access to FX HedgePool 

via the primary Order Management 

Systems used by the vast majority 

of the buy-side today – including 

Blackrock’s Aladdin and Charles River 

Development (CRD),” he explains. 

“These integrations allow traders 

to direct orders to FX HedgePool in 

a familiar workflow to their typical 

trading process, which has been a 

game changer for onboarding new 

clients.” 

Increasing pool diversity is not a 

priority for either FX HedgePool or 

Cürex. Singleton explains, “Candidly, 

we don’t believe the buy side needs 

more liquidity pools. P2P liquidity is 

a potential additional liquidity source 

with tremendous benefits. Adding 

other layers of liquidity pools beyond 

the myriad that already exists probably 

provides no additional benefit, 

especially when buy-side traders 

typically execute with the same top 

five liquidity providers.” 


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Improving Execution Outcomes: How bright ideas and cutting edge technology are powering the evolution of P2P FX 

Instead, these service providers 

are delivering unique functionality 

that boosts P2P’s appeal. Singleton 

highlights Cürex’s efforts to maintain 

a clean pool, free of hedge funds and 

HFTs. Matching technology comes into 

play here, something Singleton says 

Cürex is highly devoted to. 

“Cürex also provides an auditable 

benchmark for all executions through 

our proprietary benchmark calculations 

with FTSE/Russell,” he says. “Our 

Cipher analytics platform documents 

the outcomes of customer trades in 

relation to pre-trade market conditions, 

including those trades resulting from 

P2P matches.” 

in place to access pricing. This creates 

a bottleneck of liquidity amongst the 

top-tier banks that have competitive 

market-making capabilities AND the 

resources necessary to onboard and 

maintain a broad network of buy-side 

relationships.” 

He explains that P2P liquidity, and 

swaps specifically, needs credit 

intermediation since buy-side firms lack 

credit relationships with each other 

to settle trades bilaterally. Real money 

buy-side firms do not use traditional 

intermediation models thanks to credit 

diversification requirements and broker 

restrictions across their accounts to 

consider. 

banks can offer credit/settlement 

services to our common buy-side 

clients without the need to take 

market risk or compete for liquidity.” 

“This model allows our members to 

match naturally offsetting liquidity with 

each other, while distributing credit 

across their familiar bank relationships 

at fixed, transparent credit fees – 

creating a new credit marketplace 

in the swaps market,” he continues. 

“This “novel, yet familiar” model has 

allowed us to build a healthy balance 

between serving the buy-side and the 

sell-side simultaneously – optimizing 

idle capacity and creating the space to 

do more of what they do best.” 


FX HedgePool’s focus on swaps 

has forced them to look at things 

differently. Moore explains that 

separating credit from liquidity is a 

critical innovation that FX HedgePool 

has introduced to solve a longstanding 

issue. “Historically speaking,” he 

says, “there’s been a dependency 

between liquidity and credit, which 

is particularly relevant to swaps and 

forwards. Buy-side traders rely on the 

banks with whom they’ve got ISDAs 

“We looked at things differently 

and recognized that there are 

several high credit quality banks 

with balance sheet capacity, ISDAs 

in place, and strong relationships 

that were not meeting their 

volume capacity. Leveraging the 

documentation and risk management 

framework of existing bilateral 

trading arrangements, FX HedgePool 

introduced the concept of credit-asa-service 

(CaaS) where participating 

RISING ELECTRONIFICATION AND P2P 

As electronification rises in FX, 

where does this leave P2P? Moore 

is optimistic about its prospects. 

“Given the growing volumes and 

higher time demands on buy and 

sell-side traders,” he says, “cost 

management and automation 

without compromising pricing or 

transparency will be paramount. 

Alternative sources of liquidity 

combined with automation will be a 

common theme – the space that FX 

HedgePool is designed for.” 

Singleton is similarly optimistic about 

electronification assisting P2P’s 

growth. “Peer-to-peer matching 

can only exist in the electronic 

environment,” he says. “We think 

the buy side will focus on one or two 

alternative solutions to maximize the 

benefit of more volume matched with 

no market impact.” 

Ease of onboarding and access are critical to greater adoption of the P2P model 

Time will tell how the P2P landscape 

in FX changes and how successful 

new approaches like Peer-To-Peer-To- 

Bank are likely to become. Either way, 

there’s no doubt that service providers 

are constantly innovating to deliver 

better experiences to their clients with 

novel technology. 



BRINGING BANKS INTO THE 

LOOP: IMPROVING LARGE TRADE 

EXECUTIONS WITH A PIONEERING 

PEER-TO-PEER-TO-BANK MODEL 

While the novel developments we 

have been talking about in this article 

are making a significant impact, 

some believe they don’t fully address 

concerns that the P2P model fails 

to replicate bank risk warehousing 

under adverse conditions. It is a 

concern LoopFX has taken into 

account and claims to have found a 

solution. 

“Models that only enable Peer-To- 

Peer trading are problematic because 

you often cut out one of the largest 

and most critical parts of the market 

– the banks,” says Blair Hawthorne, 

CEO of LoopFX. “Banks make up 

a large part of the market whilst 

providing critical risk warehousing 

and uncorrelated flow,” he continues. 

“Why would you not want to include 

them?” 

Hawthorne believes there are 

significant issues preventing the 

necessary widespread adoption 

required for P2P models- a view born 

from his experiences in his former 

senior trading role. 

“From my old trading seat, I 

struggled to find a model that 

I would be comfortable using. 

There are loads of possible 

headaches,” he says. “Some of 

these include asset managers 

having to incur significant resources 

to connect, disintermediation of 

their longstanding panel of banks, 

taking large market risk when 

searching for a match, and the 

need to accommodate new legal 

documentation. It was too much 

effort for too little reward. LoopFX’s 

new Peer-To-Peer-To-Bank model 

addresses all of these challenges 

head on.” 

Changes to legal documentation and 

workflow are often unacceptable to 

most asset managers and Hawthorne 

says that market participants 

continuously demand solutions that 

embed seamlessly within existing 

workflows. “Models also have to have 

a reasonable chance of matching,” 

he says, “and this means getting 

both asset managers and banks 

working together. P2P by its name 

disintermediates a critical partner.” 

To address these shortcomings, 

LoopFX is pioneering the first 

dark pool that centralizes bank 

axes with P2P trading, enabling 

market participants to source larger 

block matches. Loop’s Peer-To- 

Peer-To-Bank model focuses on 

eliminating information leakage 

when sourcing large block liquidity. 

Powering LoopFx’s platform is the 

first continuous, non-discretionary, 

midpoint matching engine across 

both Buyside and Sellside orders on 

Type 2 SOC 2 certified infrastructure. 

Bringing banks into the picture has 

significant advantages, Hawthorne 

says. “Banks have a new avenue for 

managing risk safely, leading to a 

healthier ecosystem, which should be 

reflected in all client pricing – even 

those not directly accessing the Loop. 

Also, partnering with banks keeps 

all market participants in the loop; 

nobody gets disintermediated.” 

Hawthorne details a few new 

opportunities the new model brings 

in contrast to current P2P workflow. 

“Finding a match for large spot 

trades while ensuring no information 

leakage is easier in a dark pool,” 

he says. “The workflow is also 

simpler. LoopFX uses existing trading 

platforms and workflows, causing 

minimal disruption and enabling 

ease of integration and adoption. 

Participants receive better execution 

at lower cost and impact the market 

less.” Participants can search for 

liquidity via Loop’s dark pool directly 

or search indirectly through the Bank’s 

algo that posts an axe to the Loop. 

“Peer-to-peer-to-bank solves a real 

problem in this way,” Hawthorne 

says. “It gives clients more control 

and transparency. Banks are included 

in the system and can target parts of 

the market they usually struggle to 

monetize.” Critically, these conditions 

lead to higher match rates-something 

every stakeholder - from LC to LP to 

platforms - wants. 


The Nordics: 

A region where demand for digital 

FX services is now focused on 

more sophistication through 

proven technology 

REGIONAL E-FX PERSPECTIVE 




The Nordic markets have historically been early users of electronic trading solutions and 

have quickly embraced new technologies and the benefits these can bring. With that 

powerful first mover tradition across the region, Vivek Shankar now explores how the 

growth of its digital FX services has been evolving with demand now focused on even more 

sophisticated e-FX solutions and automation of the entire trade workflow instead of just 

portions of it. 

MAY 2023 e-FOREX 23

The Nordics: Demand for digital FX services is now focused on more sophistication through proven technology 

“API adoption continues to play a big role in the development 

of future-proof solutions going from the SMEs all the way to 

our largest corporates and financial institutions” 

much more fruitful and saved time 

for all market participants in defining 

what is acceptable behaviour and 

what is not.” 


Carolina Trujillo 

Carolina Trujillo, Head of e-FX 

Distribution at SEB, explains that 

current trends point towards 

increasing demand for electronic 

sophistication, not just adoption. 

“At this stage, I see two main 

trends,” she says. “The first one is 

sophistication for some clients that 

are more conscious of different 

offerings, from established platforms 

or banks to fintech alternatives, and 

want to understand the implications 

of those choices, and when it is the 

right time for them to make those. 

This can mean anything from adding 

algos or share class hedging to your 

trading tools to rebuilding your 

infrastructure to make sure you have 

the best solution to fit your needs.” 

“The second trend,” she continues, 

“is the broadening of the scope 

of “electronic FX” from just the 

execution to pre and post-execution 

focusing on the automation of those 

components.” 

At first glance, one would think 

this demand can only be fulfilled by 

increasingly advanced technology. 

However, Matti Honkanen, Director, 

Head of NextGen FX at Nordea, 

doesn’t think so. “It is a common 

misconception that the ongoing and 

upcoming digital transformation 

will be driven by new emerging, 

revolutionary and unforeseen 

technologies,” he says. 

“Nordea’s position as one of the 

leaders in digital FX is not based on 

the extensive use of technologies, but 

on a smart and customer demanddriven 

use of unexciting technologies. 

We certainly try new technologies, but 

quite often we figure out the old tech 

can do the job better.” 

Given these trends, how are Nordic 

banks addressing customer needs and 

changing market regulations? 

REGULATORY CHANGES AND 

ADOPTION OF THE FX GLOBAL 

CODE 

The FX Global Code has been widely 

adopted by institutions worldwide, 

and the Nordics are not an exception. 

However, mirroring worldwide trends, 

some work remains to be done. 

“A very high ratio of the sell side is 

onboard but the adoption on the buy 

side is lacking,” Trujillo says. “SEB is 

very involved in the work done by the 

FX Global Code and it is surprising 

how some FX participants of large 

buy-side firms have not heard of the 

FX Global Code at all, so there is still a 

lot of work to be done there.” 

She points out that while the Code 

positions electronification as the best 

way forward, its true impact lies in 

clarifying grey areas in workflows. “All 

signatories of the FX Global Code have 

an interest in promoting it to their 

counterparties,” she says. “I would 

say that the main effect of the Code 

has been to clarify some grey areas 

or confirm which market practice to 

follow. This has made conversations 

While the Code’s adoption is a priority, 

of more urgency is adapting to the 

raft of regulatory changes FX has 

witnessed recently. Trujillo notes that 

global changes have had a far bigger 

impact than local ones. She cites 

a pertinent example. “One of the 

changes has been caused by SA-CCR. 

It affects the liquidity offering from 

some banks forcing a re-shuffle of 

main providers in the forwards and 

swaps space.” 

A need for constant electronic 

upgrades in response to regulatory 

changes is a trend underway in 

Scandinavia, reflecting the global 

market. Trujillo believes market 

participants must think deeply about 

the value they deliver to clients with 

tech upgrades versus the need to 

upgrade tech to keep pace with 

regulatory changes. 

“All global platforms must comply with 

so many different regulations,” she 

says. “This is forcing some of them 

to carry big upgrades that have an 

impact on all their clients including 

the Nordic sell-side and buy-side. The 

amount of tech resources needed to 

keep pace with regulatory changes is 

significant and needs to be carefully 

balanced with tech activities that 

deliver value to clients.” 

INNOVATIVE PRODUCTS AND 

TREASURY AUTOMATION 

Treasury automation is a good example 

of an activity delivering significant 

value thanks to electronification and 

technological adoption. Nordea’s 

Honkanen has kept a keen eye on 

developments in this space. He says 

automation is steadily progressing, 

with different market players at 

different places in the journey. 


Exotic to some. 

Home market to us. 

A global bank with Scandinavian expertise. 




“Initially, treasuries focus on automating what they have 

done before,but eventually, they discover that automation 

enables them to do new things.” 

Matti Honkanen 

“Treasury automation is an 

evolutionary process,” he says, 

“with the most advanced treasuries 

improving all the time, while others 

start their automation journey. Initially, 

treasuries focus on automating what 

they have done before, but eventually, 

they discover that automation 

enables them to do new things. This 

move from cost and time savings 

to increased profits and decreased 

risk is where things become more 

interesting.” 

When asked about broader 

technological innovations that might 

impact FX, Trujillo points to payments. 

“There is a lot happening in the 

payment space that will eventually 

have an impact on FX,” she says. 

“Some of these changes happened 

a few years back but are starting to 

materialise now.” 

She highlights the example of the 

PSD2 directive. “It has not drastically 

changed the landscape yet but 

changes are definitely coming,” she 

says. “Nordic banks like SEB have also 

incorporated the opportunities and 

threats it represents into its strategy 

and there is a big FX component in 

that.” 

Both Trujillo and Honkanen point to 

existing technology as the primary 

driver of change, both in the 

broad market and in applications 

like treasury automation. “The 

technologies that revolutionise 

treasuries are not necessarily 

revolutionary themselves,” 

Honkanen explains. “Rather, the 

way existing, old, and “boring” 

technologies are used is what 

makes a difference.” He cautions 

that getting the basics right is 

more important than adopting 

fancy technology. “Hiring people 

with basic technical skills is more 

important than hiring an army of 

AI experts. Put them together with 

the people who know the treasury 

functions and practices inside out, 

and the magic follows.” 

As an example of existing or “boring” 

tech powering innovation, Trujillo 

cites the humble API, long a mainstay 

of the technological landscape. “API 

adoption continues to play a big role 

in the development of future-proof 

solutions going from the SMEs all 

the way to our largest corporates and 

financial institutions,” she says. “It 

broadens perspectives and connects 

systems from pre to post-trade in 

a much more efficient way. At SEB, 

we help our clients implement these 

APIs, whether integrated or not with 

third-party solutions, to fit their 

challenges and automate as much of 

their workflow as possible.” 

“APIs have been available in FX for 

many years,” she continues. “Smaller 

clients have preferred Rest APIs for 

some time now but even bigger firms 

that were typically focused on FIX are 

seeing the advantages of the versatility 

and ease of use of Rest APIs.” 

When asked about the impact of 

this API-first approach on a client’s 

choice of trading platforms, Trujillo 

explains that integration, instead 

of a platform’s size, is the critical 

differentiator. “The popular platforms 

are still the first choice in the region,” 

she says. “They are established and 

the plug-in is easier. They are also 

very well connected to different 

client systems. This means changing 

main platforms is quite unusual and 

definitely requires a lot of work from 

the clients.” 

Despite this, she says, smaller 

players are having success. “It 

usually happens when the client 

is undertaking some major 

technological change and is reviewing 

the possibilities in their FX workflows. 

In those cases, both smaller platforms 

with good integration capabilities, or 

APIs or a combination of both can be 

the final choice.” 

Honkanen notes that given the 

relative familiarity the market has 

with existing tech, getting started 

is the most important step. “I am 

not a great believer in detailed preplanning,” 

he says. “You don’t really 

know what lies ahead before you 

start the journey. Instead, acquire 

some basic technical knowledge and 

collaborate with a team of seasoned 

treasury managers and technology 

experts.” 

And what would this look like in 

practice? “Identify low-hanging fruit 

that instil confidence throughout the 

company and provide the financial 

means to fund the next stages,” 

he says. “Don’t try mapping all 

the possible needs you might have 

now, let alone in the future, before 

taking off. The greatest danger is 

analysis paralysis when your plans 

get increasingly more detailed, and 

you realise there are even more 

unknowns.” 



THE STATE OF ELECTRONIC 

ADOPTION ON THE BUY-SIDE 

Honkanen notes that the buy-side’s 

willingness to try new technology 

makes the Nordics a fertile ground for 

those offering buy-side solutions. “In 

the Nordics, finding early adopters 

willing to collaborate on building 

new solutions is not as difficult as in 

other places,” he says. “This leads to 

more rapid development. So, I would 

say the existence of technologically 

sophisticated clients has made 

our solutions and services more 

advanced.” 

John Stead, Pre-Sales and Marketing 

Director at smartTrade, echoes 

these views. “The technologically 

advanced nature of the Nordic buyside 

community has influenced the 

development of digital FX trading and 

electronic payment solutions by driving 

demand for cutting-edge technology, 

automation, and transparency. But, 

we would also argue that end clients 

are equally sophisticated in awareness 

of market levels- meaning the banks 

“The technologically advanced nature of the Nordic buy-side 

community has influenced the development of digital FX 

trading and electronic payment solutions...” 

have to be very competitive to win 

business.” 

He expands this statement by 

highlighting a few examples. “MBP 

platforms are very much in evidence, 

as in other markets, but we believe 

that the buy side is gradually starting 

to become more aware of the costs 

to their bank partners of using these 

channels,” he says. “In the future, 

it would not be surprising if more 

and more clients move to direct 

bank-to-client channels which favour 

banks with sophisticated SDP and 

API offerings. This direct provision of 

liquidity using smartTrade’s flat fee 

commercial model, for example, saves 

the banks money and allows them to 

pass savings onto their clients which 

benefits everyone.” 

Jusa Santalo, Sales Director, Nordics, 

at BidFX also points to the adoption 

John Stead 

of the multi-bank concept 20 years 

ago as evidence of the Nordic market’s 

sophistication. “Obviously liquidity is 

still vitally important but investing in 

systems that are nimble,” he says, “fast 

to move, and ‘future proof’ whilst 

streamlining processes and automating 

reporting, has become a key focus 

for a firm’s ability to compete whilst 

ensuring regulatory compliance.” 

A need for constant electronic upgrades in response to regulatory changes is a trend underway in Scandinavia 




“Treasury desks here are looking very keenly at what the 

‘next generation’ of sophisticated trading platforms can 

achieve through optimising workflow efficiency whilst 

simplifying the user experience,” 

Jusa Santalo 

Mirroring worldwide trends, buy-side 

firms in the Nordics continue to adopt 

algo-based execution. Santalo explains 

that service offerings go beyond 

merely offering execution services, 

though. “Local banks have developed 

their algo offerings, either directly 

or via white labelling and we expect 

further adoption in the market as 

technology evolves. Investors need to 

understand how the algos are going to 

work, and the pools they interact with. 

They want to know the probability 

of completion of an algo traded at a 

certain time of the day, according to 

volatility, and obviously the associated 

costs and possible market impact.” 

He points to BidFX facilitating access 

to over 20 LPs’ algo suites across all 

deal types, including NDFs. “BidFX 

further supports clients with its 

advanced TCA solutions that offer 

a robust analytical framework that 

can be used to measure and drive 

performance. Our analytics offer 

numerous features such as best 

execution activity LP rankings and hit 

ratios, market share analysis, spread 

analysis, and detailed analysis of the 

best time to trade. Also, BidFX was 

the first EMS to go live with the FX 

Algo Wheel which has seen a massive 

uptick in algo usage across client types 

as they become more comfortable 

with the concept in FX.” 

smartTrade’s Stead continues the white 

labelling theme. “We recognize that 

not all banks wish to develop and 

maintain their own algos which is why 

the ability to white label algos from 

tier 1 banks strikes a good balance 

between development costs and 

giving clients a rich offering in line 

with their peers,” he says. 

“The smartTrade AlgoBox tool allows 

banks to write their algos which are then 

exposed to end clients,” he continues. 

“By co-locating the algos alongside 

the standard front office aggregation, 

distribution, and OMS components 

banks can ensure the lowest latency 

whilst leveraging all the standard clients’ 

risk and credit controls.” 

PLATFORM DESIGN CHOICES AND 

FUTURE EVOLUTION 

The move towards demanding greater 

sophistication and efficiency in 

technological investments that SEB’s 

Trujillo pointed out earlier is evident 

in the buy-side’s platform preferences. 

Santalo says that while a “herd 

mentality” used to exist, this has 

changed, reflecting a higher degree of 

client sophistication. 

“Their choices seem to be much 

more measured and discerning now, 

with closer attention to detail in their 

evaluation process, when choosing 

trading and workflow solutions,” he 

says. “Clients also want to go with 

a trading solutions provider that can 

solve their problems.” 

As a result, he says, agility when 

providing solutions is paramount. 

As an example, he says, “A potential 

solution that may be useful to a single 

client while another client may need 

an alternative capability from a sellside 

firm’s pricing API, which involves 

other dynamics and different lead 

times. We are highly agile, allowing our 

clients to trade via traditional GUIs or 

APIs – regionally, we receive feedback 

from many of our clients who place a 

lot of value on this aspect.” 

Stead agrees with these views and 

notes that agility is in demand even 

in platform architectural choices. 

“Clients increasingly prefer smaller, 

microservice-based platforms over 

large platforms due to their flexibility, 

customization, and scalability.” 

smartTrade’s suite uses open and 

standard APIs to cater to these needs, 

echoing Nordea’s Honkanen’s words 

about standard technology powering 

innovation. 

Santalo and Stead are equally 

optimistic about the Nordic region’s 

prospects regarding technological 

innovation. Santalo, like Honkanen, 

sees opportunities in the treasury 

automation space. “Treasury desks 

here are looking very keenly at what 

the ‘next generation’ of sophisticated 

trading platforms can achieve through 

optimising workflow efficiency whilst 

simplifying the user experience,” he 

says. 

“The growth in the focus on analytics 

will continue to rise exponentially,” 

he continues, “not only due to 

regulatory requirements but also for 

alpha preservation and enhanced 

proof of best execution. Agile 

platforms with interoperable solutions 

will continue to innovate to manage 

the collection, storage, and data 

management as not all clients have 

the resources necessary to run a 

bespoke solution.” 



Nordic countries are some of the most cashless countries and payments for private individuals are extremely efficient and simple 

Citing an example of an 

agile,interoperable solution, Santalo 

says, “BidFX collects and stores tick 

data that each LP streams to its 

clients, and makes that data available 

to the client, through intuitive 

query functions and visualisations. 

This creates a crucial feedback loop 

that enables pre-trade and in-trade 

decision making. The client can 

also anonymise this data where 

they like to help conversations and 

relationships between the buyside 

and sellside and ultimately improve 

execution.” 

“After a period of low volatility, 

highest interest rates,” Stead says, 

“financial, and geopolitical shocks 

have all contributed to a renewed 

interest and requirement to consider 

the FX element in any trading or 

hedging decisions. Our clients in 

the Nordics are responding to this 

by offering clients more advanced 

products and services over e-channels 

which previously only existed by 

phone.” 

“For example, the ability to self-service 

adjust cash flows post-trade, trading 

of new products such as options, 

and the ability to offer increased 

transparency thanks to detailed best 

execution reports.” 

“The Nordic e-FX market,” he 

concludes, “like many advanced FX 

markets, is poised for growth and 

expansion.” 

FINTECH DEVELOPMENTS 

Developments in fintech have been 

transforming workflows in Europe, 

and the Nordics are no different. A 

high degree of user sophistication has 

made the Nordics fertile ground for 

adoption and innovation. SEB’s Trujillo 

explains the state of affairs succinctly. 

“I think people’s expectations (of 

technological agility) are really high,” 

she says. “Nordic countries are some 

of the most cashless countries and 

payments for private individuals are 

extremely efficient and simple. We take 

this for granted until we travel even to 

some close neighbours in continental 

Europe and are reminded of how 

spoiled we are.” 

Trujillo says that much of the fintech 

innovation taking place is driven by 

user expectations that every app must 

work flawlessly. “Even though there 

are great offerings, I think there are 

many opportunities to help clients 

achieve this expectation,” she says. 

“Mostly in connecting their different 

areas or systems more closely to avoid 

gaps and silos.” 

BidFx’s Santalo highlights an example 

of a preference for mobile apps as 

proof of high user sophistication. 

“In the e-FX market, there is high 

demand towards mobile apps like 

BidFX Trader,” he says. “It was 

developed to meet the growing 

demand from market participants to 

trade via mobile over five years ago 

and since Covid, it has become even 

more popular as it allows our clients 

to securely manage and trade their 

FX spot, forward, swaps, and NDF 




A high degree of user sophistication has made the Nordics fertile ground for Fintech adoption and innovation 

positions and orders when working 

remotely.” 

smartTrade isn’t lagging when 

speaking of innovative solutions. 

“The demand for our services comes 

from the competition between 

banks driving up standards and 

gradually leading to demand for 

next-generation products like our 

LiquidityFX front office solution,” 

Stead says. 

“In past times, with wider spreads 

and less sophisticated end clients, 

banks could make do with in-house 

or legacy tech providers. Nowadays 

we see many banks moving to use 

more advanced global technology 

providers such as smartTrade who 

offer superior service thanks to 

greater experience and strategic 

global expertise.” 

Nordea’s Honkanen notes that 

demand for such innovation comes 

from a wide range of sources. 

“Demand for FX solutions is coming 

from institutional clients, corporates, 

businesses, and private individuals, 

each with different FX needs,” he 

says. “Institutional clients are big and 

few, while private individuals are small 

and numerous, with corporates in 

between. Fintech solutions must cater 

to these different demands.” 

While the market is challenging to 

navigate from a service provider’s 

perspective, he sees trends in the 

manner service providers have 

positioned themselves. “The roles 

of the emerging and incumbent 

companies have become clearer, 

and maybe a bit more traditional 

than it looked a few years ago,” 

he says. 

“It turned out that it was harder 

for the new fintechs to acquire end 

users than many believed. Now 

fintechs typically provide technology 

to banks and other established firms 

that already have customer trust and 

relationships.” 

The result is an ecosystem multiple 

layers deep geared toward increasing 

workflow efficiency and agility. 

Given the degree of sophistication 

present in the market, the Nordics 

will undoubtedly witness additional 

innovation. 


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Bloomberg FXGO expands 

execution and workflow suite 

Bloomberg’s FXGO is one of the markets most trusted e-FX trading platforms, with an 

unrivalled range of solutions designed to keep pace with the evolving market conditions. 

Oleg Shevelenko, FXGO Product Manager at Bloomberg, shares some of the latest 

developments and to the offering and explains how this expansion reflects the changing 

execution needs of Bloomberg’s clients. 


Oleg Shevelenko 

How has FXGO developed over 

the past year in its own right and 

as a part of the wider Bloomberg 

Business? 

FXGO has accelerated investment 

in trading workflow tools that 

respond to client needs by offering 

innovative, forward-looking solutions. 

A combination of cost-pressures, 

emphasis on improving operational 

standards and adoption of the Global 

Code of Conduct kept workflow and 

execution efficiency at the forefront. 

In response, FXGO expanded its 

automation suite to offer a full 

spectrum of FX instruments including 

Spot, Forwards, Swaps and NDFs. The 

fact that our automation and analytics 

tools are multi-asset and support a 

broad range of instruments across 

Fixed Income, Equities and FX is a 

key factor for many of our clients as 

most asset managers and hedge funds 

manage multi-asset portfolios. 

We continued to expand our workflow 

toolkit and released the ability to slice 

large orders and execute over time, 

based on the best risk transfer price, 

which has proven to be particularly 

useful in less liquid currencies. The FX 

market is truly global and so is the 

FXGO user base, which is present in 

more than 140 counties. To enhance 

execution quality for our growing 

Asia-Pacific community, FXGO has 

launched a hosting solution in 

Singapore, aimed at improving pricing 

and trade negotiation for our local 

clients which will continue to support 

electronification and the growth of 

the local markets in the region. 

How has the liquidity landscape 

changed in the recent months? 

Like all financial markets, the foreign 

exchange market experienced 

recent volatility periods related to 

geopolitical instability in Eastern 

Europe and turbulence in the US 

banking system. 

The importance of algos as an 

alternative execution method 

becomes even more essential in 



volatile markets, as liquidity providers 

typically decrease the amount of 

electronic liquidity which they stream 

on principal basis or widen bid-ask 

spreads. During periods of volatility, 

we observed a 15-20% increase 

in the usage of algos, particularly 

liquidity seeking strategies, as they 

allow clients to lower execution costs 

and market impact for their larger 

orders. 

We have also attracted additional algo 

providers, including regional and nonbank 

providers offering their unique 

liquidity to our clients including local 

currencies and peer-to-peer networks. 

As clients require finer control over 

their order execution, especially 

in volatile markets, we enhanced 

our algo suite to support more 

advanced workflows such as strategy 

amendments and rapid fills. 

As far as derivatives trading, 

the Standardized Approach to 

Counterparty Credit Risk (SA-CCR) 

and further waves of Uncleared 

Margin Rules (UMR) impacting a 

broader client base had an immediate 

effect on the cost of dealing in 

forwards and swaps. Asymmetry in 

the global implementation of those 

rules created further challenges for 

clients. Access to new liquidity and 

additional levels of price transparency 

became key. Therefore, our clients 

particularly welcomed the enrichment 

of our forward pricing tools with new 

price sources and pillar dates, offering 

swaps pricing and trading via the 

RFQ API as well as the expansion of 

our orders suite to support limit and 

benchmark orders in swaps. 

Has demand changed for pre 

and post-trade analytics and 

reporting? How have you 

responded to this? 

Increased regulatory and best 

execution standards are not only 

driving the need for a systematic 

approach to execution and increased 

levels of automation but also require 

firms to analyze resulting execution 

costs and change their execution 

process accordingly. 

FXGO integration for both execution 

and automation workflows with our 

multi-asset, transaction cost analysis 

tool (BTCA) allows clients to analyze 

their trades alongside Bloomberg’s 

market data to deliver powerful 

analysis against a wide range of 

benchmarks. Subsequently, post-trade 

analytics becomes an input into pretrade 

decision making including the 

execution style and dealer selection 

forming a very well-defined execution 

process. As the FX market is bi-lateral 

and relationship based, creating a 

common framework allowing clients 

to fully understand the insights of 

the liquidity provision and offering 

liquidity providers a detailed view 

into the trading behavior of their 

clients is key to improving the trading 

experience for both sides. 

FXGO’s new Pricing Quality Analytics 

tools delivered through Bloomberg’s 

multi-asset reporting tool for 

electronic trading (MISX) offer those 

insights and form a state-of-the-art 

quantitative platform for bi-lateral 

interaction and continuous liquidity 

improvements. 

What will be your areas of focus 

looking ahead to this year and 

beyond? 

We believe that the FX market is 

going to continue to develop at a 

rapid pace. We are prioritizing our 

development pipeline to accommodate 

both anticipated changes in market 

infrastructure, as well continuing 

to offer disruptive technologies in 

the areas of pre-trade optimization, 

workflow automation and subsequent 

data analysis. We are also going 

to continue to offer innovative 

solutions to bring more transparency 

into derivatives and local markets 

- including FX Options, NDFs and 

onshore trading tools - to connect 

participants and enhance the markets. 


FX Automation: 

Pushing Boundaries 

Sebastian Hofmann-Werther, Head of EMEA at 360T, teases 

out some of the nuances associated with automated trading 

solutions in FX. 

Asian currency pairs, but if it has 

no overnight desk then it might be 

forced to trade in hours when those 

pairs are less liquid. Using a set of 

completely customisable parameters 

this hedge fund could instead autoexecute 

these trades at a time when 


Sebastian Hofmann-Werther 

In the FX industry people often talk 

about “the buy-side” as a collective 

group when in fact there is a huge 

degree of diversity within this segment 

of the marketplace — both in terms of 

the structure and operations of these 

firms as well as their execution methods 

and objectives. 

However, over the past few years 

we’ve observed one trend that remains 

consistent across this heterogenous 

group of firms called the buy-side, and 

that’s the strong desire to automate 

more of their FX activity utilising 

execution management systems (EMS). 

But because these firms are all different, 

so too are their automation priorities. 

For example, a very large asset 

manager trading on behalf of 

thousands of funds might focus 

on ways to automatically net off 

positions between them all in order 

to reduce the overall amount of FX 

they have to trade, and thus reduce 

costs. 

By contrast, a key goal for an 

institutional investment manager 

trading international equities might 

be to minimise the amount of time 

between their equity transaction and 

the FX trade necessary to facilitate 

it, in which case automating the 

latter can help achieve this. A hedge 

fund in the US might need to trade 

liquidity conditions are much more 

favourable in order to improve the 

pricing available. 

A corporate treasurer, meanwhile, 

might look to automate parts or 

all of their FX workflows in order 

to reduce the amount of manual 

processing on the desk, freeing up 

staff to focus on other more missioncritical 

activities and minimising the 

operational risks associated with these 

processes. Often there are concerns 

that the increased automation of 

FX execution will negatively impact 

treasurers’ relationships with their 

bank partners. But contrary to this, 

the time which the treasurers save on 

manual execution processes opens up 

more room for strategic dialogue with 

the banks. 

Suffice to say, the specific use cases 

and benefits of this technology are 

myriad, but an overarching theme 

amongst every firm that we speak to 

is that they are looking for ways to 

increase productivity and drive new 

efficiencies on the trading desk, and 

automation is one way of doing this. 



DIFFERENTIATORS 

Not all FX automation solutions are built 

equal though. At 360T we believe that 

one differentiating factor between them 

is the level of granularity available in the 

rules-based structure of these tools. 

We think that having automation occur 

based purely on factors like the notional 

size of a trade and the currency pairs 

involved can be a blunt instrument. That 

is why the parameters within our EMS 

are completely bespoke, and can include 

a broad range of considerations such as 

the level of liquidity in the market, what 

percentage of a bank basket is quoting, 

how quickly quotes are being supplied, 

whether trades should be staggered as 

they go out to market, etc. 

And all of these can be applied to 

individual funds within an underlying 

account. This allows traders to instead 

automate their FX activity with scalpellike 

precision. 

Data is, of course, another hugely 

important differentiator. 360T’s 

award-winning market data feeds are 

integrated into our EMS, enabling users 

to deploy them as a tolerance check 

when auto-executing trades so they 

can be certain that no trades will occur 

further than a pre-defined distance from 

the market midpoint. 

The benefits of this are particularly acute 

when it comes to trading non-Spot FX 

instruments. This is because Spot FX 

market data is, generally speaking, a 

commoditised product that is widely 

available. This was evidenced in a recent 

survey that we conducted at buy-side 

conference TradeTech FX USA 2023 in 

which 50% of respondents said that 

the biggest gap in their market data sets 

was FX Forwards, 29% said it was in 

NDFs, 18% said FX Options and no one 

said that it was in Spot FX. 

At 360T we’re helping to address this 

gap with the Swaps Data Feed (SDF), 

a truly unique product, developed 

in partnership with DIGITEC, which 

is directly integrated into the pricing 

engines of over 20 top FX banks, 

offering full granularity across the 

curve from O/N out to two years in 

over 40 pairs (also including granular 

pricing around broken and special 

dates) and providing real-time market 

data in an unlimited number of crosses 

in G10, LM and non-deliverable 

currency pairs. 

By leveraging the 360T EMS and 

the SDF, buy-side firms are able to 

streamline their FX operations and 

enable traders to focus on the most 

time consuming or complex tasks 

on the desk while simultaneously 

ensuring that all of their trades are 

auto-executing close to the market 

midpoint. 

CONTINUOUS INNOVATION 

It’s also important to recognise that 

when it comes to automation, buyside 

requirements are constantly 

evolving, and so the technology 

solutions available to them need to as 

well. That is why 360T is committed 

to conducting three new technology 

releases each year, to ensure that all 

our products — and especially our 

EMS — develop alongside our clients 

needs and remain at the cutting-edge 

of the FX industry. 

Some of our latest and upcoming 

releases exemplify this, and how we 

are helping buy-side firms to further 

automate their FX trading activity 

across different types of workflows. 

For instance, we have introduced 

a new functionality which enables 

firms using the 360T EMS to put 

cross-currency mixed given portfolios 

into competition. They can receive 

automated-pricing from their 

counterparties and enjoy full posttrade 

straight-through-processing (STP) 

whilst also eliminating some of the 

“clean-up trades” often associated 

with these portfolios. 

In addition, the Forward First Fixing 

functionality added to the EMS 

enables users to automatically put 

banks into competition for the forward 

points of their benchmark orders, 

potentially leading to improved pricing 

on these trades. 

Looking ahead, we will shortly be 

introducing the ability for buy-side 

firms to access EFPs (exchange for 

physical) and FX Futures within the 

streamlined workflow of our EMS, 

allowing them to maximise the 

benefits of both the listed and OTC 

marketplaces through one platform. 

Another area where 360T continues 

to innovate is around pre-trade 

transaction cost analysis (TCA), which 

has been a hot topic amongst buyside 

firms recently. We are about to 

launch advanced pre-trade TCA tools 

into our EMS so that buy-side firms 

can automatically get additional 

information that will help them react 

to factors like market volatility and 

depth ahead of execution, helping 

them to more effectively achieve their 

trading objectives. 

THE MAJOR TREND 

Automation in all its various guises 

continues to be a major trend — and 

arguably the major trend — amongst 

buy-side firms trading FX. 

Therefore, we believe that as a 

technology partner to this highly 

diverse group it is vitally important 

to offer a differentiated technology 

solution which can deliver tangible 

and quantifiable benefits to the users. 

In addition, we need to keep pushing 

boundaries, investing in new 

innovations which can allow buy-side 

firms to automate different elements 

of their workflows and trading. 


THE E-FOREX INTERVIEW 

Tom San Pietro 

In safe hands: 

What can we expect next from 

FXSpotStream and its new 

business model? 


THE e-FOREX INTERVIEW 

A new chapter has opened for FXSpotStream as the company employs a different business 

model that will enable it to generate revenue to reinvest in its market leading service. 

e-Forex spoke to Tom San Pietro, the firms new interim CEO to learn more about his plans 

and discuss what lies ahead for the business as it embarks on the next stage of its journey. 

Hi Tom, and welcome to e-Forex. 

Please can you give readers an 

overview of your background and 

career to date? 

Thanks for having me. I’ve been 

with FXSpotStream, as CTO for the 

past six years. I had a strong hand 

in the development of our FX algo 

project, as well as the building and 

implementation of our new low 

latency network. Prior to FSS I was 

head of FX Trading Venues for Thomson 

Reuters. 

My professional journey gives me a 

great balance of experience within 

the industry, along with an intimate 

understanding of the company – its 

strengths and weaknesses – putting 

me in a great position to help us grow. 

This is a tremendous opportunity and I 

am grateful for the confidence shown 

by the board and the staff and look 

forward to repaying them. 

Despite some noise in the media, it has always been business as usual for us here at FXSpotStream 

we will accept we have not. My first what we came out with was a better, 

action as interim CEO was really to more inclusive solution that benefits 

press the pause button on everything everyone. 

that was going on and speak to our 

clients and LPs. I wanted to get their 2022 was a record year for 

thoughts on the situation and find out FXSpotStream. Does that put any 

what was important to them before added pressure on the company to 

making any decisions. 

perform in 2023? 

There have been a lot of changes 

within the company so far this 

year, on both the technology and 

business fronts. While some of those 

changes we have done a good job of 

communicating, there are others that 

I was then able to, with the help of our 

global team and board of directors, 

to put together a plan that took 

those needs into consideration. We 

approached the situation with honesty 

and understanding, and I think that 

2022 was a tremendous year for 

FXSpotStream. Our ADV was up 

over 30% year on year and we, yet 

again, grew at the fastest rate of 

any FX service, of those reporting 

their volumes. We saw growth in all 

2022 was a tremendous year for FXSpotStream 


In safe hands: What can we expect next from FXSpotStream and its new business model? 

always looking to get out and meet 

with our clients and LPs face to face. 

Your background is technology. 

Does that change the focus of the 

company moving forward? 


We feel that the level of service that FXSpotStream offers is unrivaled in the FX market 

products and continued to grow our USD63.467billion, an increase of 

client base, while helping our current 1.85% when compared to the same 

clients maximize their efficiency. That period last year. Despite some noise in 

is our goal for every year and 2023 is the media, it has always been business 

no different. We have a tremendous as usual for us here at FXSpotStream 

offering and I am extremely confident and our volumes reflect that. 

that we will continue to build on the 

success we have seen over recent years. The energy from within the company 

also reflects that, too. Last year was 

And how is 2023 looking as we a great year for everyone here and I 

near the end of Q2? 

think the team is energized as a result 

of that. Our Sales team has been 

The momentum from 2022 has more active than ever, with trips to 

continued into 2023, in a much Switzerland, Amsterdam, South Korea, 

less volatile market. Year to date, Singapore, Hong Kong and Dubai 

we currently have an ADV of 

already in the books this year. We are 

I wouldn’t say it changes the focus; our 

goal as a company has always been 

to provide the best service possible 

for our clients and LPs. Obviously, 

with any new CEO, there are things 

I will value differently, and some 

things may change, but the focus 

will always remain the same. While 

certain changes were set in motion 

towards the end of 2022, which 

means the company now operates in a 

slightly different manner, the day-today 

operation, the level of customer 

service and performance will only 

continue to improve. 

From a technology standpoint, we 

are in the process of a large scale 

migration to a new low-latency 

network. This will be our big focus 

in 2023 as we feel it brings the most 

value to everyone connected to the 

service. We also have several other 

proposals that we are in the process of 

working through, 

You mentioned changes within the 

organization, can you elaborate on 

that? 

We have a tremendous offering and I am extremely confident that we will continue to build on the success we 

have seen over recent years. 

One big change for us in 2023 is 

obviously the business model. As 

the need to maintain, develop and 

upgrade our service increases, so 

does the need to generate revenue to 

reinvest. In the past, FXSpotStream has 

operated as a market utility, dividing 

our costs equally between liquidity 

providers and operating at net zero 

profit. The new model will allow us to 

generate revenue, which means that 

when new opportunities arise, we are 

able to invest more heavily, without 

the need for intervention from our 

board. 



Our London office team 

While this has led to an increase 

in costs for LPs, we have worked 

closely with them to communicate 

the value in this model, and develop 

a rate card that reflects the value 

of the service rather than simply 

covering costs. Moreover, we have 

introduced flexible payment options 

for our LPs, allowing them to choose 

between a subscription model, a 

brokerage model, or a hybrid that 

includes a smaller subscription 

fee, with a favorable rate card on 

top of that. For our LPs it is the 

first time they have been able to 

select their payment plan based on 

their business and highlights our 

willingness to listen to their needs 

and structure our business around 

them. 

There are a number of possibilities this 

opens the door to, and we are very 

bullish about the move. 

And could that include new LPs on 

the service? 

We are very cognizant of the fact 

that our clients have relationships 

with many LPs. It is what our business 

model is designed around. And we 

know that those clients are going 

to work with those LPs regardless of 

whether they see them over FSS or 

not. We are currently in talks with 

a number of LPs about joining the 

service. 

There was a growing demand 

from clients for more choice in the 

liquidity they were seeing. On the 

previous model however, it was 

difficult for new LPs to pay the 

subscription fee while building their 

business with us. Now, with a variety 

of pricing models, we can have the 

conversation with potential new LPs 

and address the client demand for 

variety in their liquidity pool. 

We know that the best way for any 

of our clients to do their business 

is to access all their liquidity via 

one service and this is another step 

towards FXSpotStream being that 

solution. 

How do you feel your offering 

compares to others out there, and 

what sets you apart? 

FXSpotStream has always had a unique 

offering for clients and LPs, and I do 

not think that has changed. Clients do 

not pay a fee to access liquidity from 

15 tier 1 liquidity providing banks. Our 

dedicated team handles the heavy 

lifting when it comes to setup and 

onboarding, making the process as 

efficient as possible for clients and 

LPs. In fact, adding a new LP is as easy 

as flicking a switch, giving clients real 

flexibility on who they do and do not 

see pricing from. 

There is no denying that the company 

has grown a great deal in recent years. 

What is important however, is to 

recognize what drove that growth and 

continue to prioritize those areas. We 

have always described FXSpotStream 




as a ‘large company with a small 

business mindset.’ By that we mean 

that while the client count continues 

to grow, the level of attention we 

dedicate to each client on the service 

should not change. We feel that the 

level of service that FXSpotStream 

offers is unrivaled in the FX market, 

and our Client Services & Support 

Team, managed globally by Marc Sini, 

takes a great deal of pride in their 

Our Tokyo office team 

ability to proactively work with clients 

to address an issue before it escalates. 

The buzz word out of 

FXSpotStream recently has been 

Algos. How has that project 

performed? 

The scale of the algos project was 

incredible. Taking the entire algo 

offering of 14 LPs and normalizing 

everything over one API was a 

tremendous amount of work and 

something we are very proud of. We 

have since added all algos to our GUI 

and made several enhancements after 

listening to feedback from our clients. 

While the project brought a few 

surprises for us, in terms of who 

wanted to access algos and the way 

in which they did, we are delighted 

with the reception and continue to see 

demand from clients. 

We are in the process of a large scale migration to a new low-latency network 

As with all product additions, we 

understand that the benefit is twofold. 

Of course, we have a strong client 

base and adding new products allows 

them to bring more of their business 

to the service. But it also addresses 

gaps in the offering that may have 

been sticking points with prospective 

clients. These additions can sometimes 

allow new clients to dip a toe, before 

deciding to move more of their 

business across after realizing the 

benefits of FSS. We have seen this 



FXSpotStream has always had a unique offering for clients and LPs 

with a number of clients where, after 

adding a particular product, it opened 

the door for them to migrate all their 

business over to FSS. 

There is continued work on algos 

however, as banks fine tune their 

offering. We are constantly working 

with our LPs to ensure that we 

support the most up-to-date algos and 

features. 

Has the focus shifted away from 

algos now? 

We are always looking to help clients 

and LPs maximize their efficiency. 

If we feel that there is a particular 

client that would benefit from algos, 

or a particular bank’s algos, as with 

all products, we are always happy to 

make an introduction. Our dedicated 

Sales and Relationship Management 

teams take a hands-on approach with 

clients and LPs, maintaining open and 

regular communication. 

I would not say we have shifted 

our focus away from algos, we are 

constantly working to add new LP 

algos as they are launched, and 

support the products needed – one 

example being the recent interest 

surrounding NDF algos – but we are 

now placing a strong emphasis on our 

new low-latency architecture project. 

This has been a long-standing project 

that we were very excited to roll out. 

After migrating all LPs, along with 

a sample of smaller clients, we are 

extremely happy with the market 

data we have received. Clients are 

seeing market data latency times that 

are really outperforming where we 

expected them to be and, while we 

are still working on the max latency 

times we are looking to deliver, the 

initial reaction from clients has been 

very positive and they are excited 

about the results they have seen so 

far. 

While we wrap up the market data 

side of the project, work is already 

underway on the orders aspect and 




we are hoping to begin that migration 

by the end of the year. 

What demands does that place on 

you and the team? 

The team has responded very well 

given everything that has been asked 

of them this year. There is a feeling 

of excitement here at the prospect of 

adding new LPs and the LPs being able 

to have a say in how they are charged. 

But the changes have shone a light 

on some areas in which we would like 

to strengthen our team and we are 

looking to make some additions to 

address this. 

One role we are excited to add is 

Liquidity Manager. We feel there is a 

real need, especially if we are to open 

our doors to new liquidity providers, to 

have someone directly responsible for 

these relationships. 

We know that the best way for any of our clients to do their business is to 

access all their liquidity via one service 

We are also looking to add a sales 

presence on the ground in Singapore. 

Singapore has been on the radar for us 

for a while now, but it’s very difficult 

to penetrate a new region without a 

dedicated presence. While we continue 

to expand the service in terms of 

products, new regions are also an 

effective way to target and acquire new 

clients. As a result, we are looking to add 

a full time salesperson in Singapore. 

And finally, what does the future 

hold for FXSpotStream? 

The core model and the philosophy of 

the company will not change. Since 

day one our aim has been to provide 

a more efficient and cost-effective 

way for clients to access liquidity. But 

with each addition we make, whether 

that be new LPs, new regions, new 

staff or new products, we open 

the possibilities for clients to use 

FXSpotStream and that is something 

we are tremendously excited about. 

As we delve further into our lowlatency 

architecture project, we believe 

we have a strong pipeline of clients. 

If we continue to execute at the same 

level of efficiency as the last eleven 

years, we feel we have a very good 

year ahead of us. 



THE CORE MODEL AND THE 

PHILOSOPHY OF THE COMPANY 

WILL NOT CHANGE 


The devil is in the detail: 

shining a light on FX 

Settlement Risk and what 

still remains to be done to 

address the issues 

Keith Tippell, Chief Product Officer at CLS Group outlines some of the work being done by 

CLS and steps it is taking to meet the challenges of FX Settlement Risk. 


Keith Tippell 

Has CLS been able to offer further 

insight on concerns regarding 

rising settlement risk in the FX 

market? 

International regulators have 

expressed concern over rising FX 

settlement risk, especially in emerging 

market (EM) currencies and other 

growing segments of the market that 

lack payment-versus-payment (PvP) 

arrangements. Despite these concerns, 

volumes in CLSSettlement have grown 

steadily, with average daily values 

settled exceeding USD6.0 trillion. The 

asset management community, which 

accesses CLSSettlement indirectly 

through settlement members, has 

been a significant contributor to this 

growth. 

To better understand settlement 

risk, we worked with a subset of 

our settlement member banks and 

analyzed their trades to determine 

how they were settled. This provided 

a good indication of the market’s 

management of settlement risk and 

the range of mechanisms used to 

settle FX flows. 

Our analysis showed that of the FX 

transactions eligible for CLSSettlement 

(which comprise 80% of all FX 

transactions according to the 2022 

BIS Survey 1 ), on average 51% 

of the traded notional is settled 

through CLSSettlement. Much of the 

remainder comprises inter-branch 

and inter-affiliate trades (35%) or 

trades where settlement occurs via 

a single currency cashflow or over 

accounts within the banks’ direct 

control (together, 8%). This leaves 

around 6% of trades exposed to 

settlement risk that could be settled 

via payment versus-payment (PvP) in 

CLSSettlement, primarily comprising 

trades across large numbers of 

corporates and funds that do not 

trade in high volume. 

How is CLS addressing policy 

makers’ concerns over settlement 

risk? 

We fully support wider adoption of 

PvP and applaud the efforts of the 

Global Foreign Exchange Committee, 

whose FX Global Code encourages 

its use, and of the Financial Stability 

Board, whose Cross-Border Payments 

Roadmap has a dedicated building 

block to further PvP adoption. 

With regards to CLS-eligible 

currencies, the 6% of trades 

that could be settled via PvP in 

CLSSettlement is the target of 

ongoing efforts to increase adoption 

of CLSSettlement. 

Addressing settlement risk beyond 

CLS-eligible currencies may 

require an alternative solution. As 

a systemically important financial 

market infrastructure, adding new 

currencies to CLSSettlement is an 



extended effort that is subject to 

several requirements, including 

ongoing support from the central 

banks on both sides of the currency 

flow, and in some cases changes 

in the target jurisdiction’s laws and 

regulations. 

Given these complexities, we are 

exploring several avenues to expand 

PvP coverage. For now, we are focusing 

on growing CLSNet, our automated 

bilateral payment netting calculation 

service for over 120 currencies to 

increase efficiencies for EM currencies 

and help mitigate the risks that can 

be addressed now. CLSNet may also 

potentially form the foundation on 

which subsequent potential new 

settlement services could operate. 

What solution can CLS offer 

market participants now for 

addressing rising settlement risk 

in emerging market currencies? 

CLSNet already helps to mitigate 

risk associated with trading EM 

currencies. It supports netting to 

reduce the payment obligations 

exposed to settlement risk while 

improving operational and liquidity 

efficiencies. Crucially, most of the 

interbank transaction flow through 

CLSNet is in the deliverable EM 

currencies that pose the most 

settlement risk for CLS’s settlement 

members. 

Over the past year, the service has 

seen a substantial rise in adoption, 

with the average daily value of net 

calculations increasing 328% year-onyear 

during 2022. On 15 March 2023, 

we witnessed a record daily notional 

of USD274 billion in net calculations. 

The growing CLSNet community 

includes eight of the top ten global 

banks; latest additions include First 

Abu Dhabi Bank and UBS, and current 

onboardings include Deutsche Bank 

and MUFG Bank. 

Successful settlement risk mitigation 

has been largely achieved for CLSeligible 

currencies via CLSSettlement. 

But with the growth in EM currency 

trading, the remaining challenge 

is how to mitigate settlement risk 

for currencies ineligible for PvP 

settlement. 

For these currencies, mitigating 

operational risk, optimizing liquidity 

and creating operational efficiencies 

through a centralized, standardized 

and automated process, like CLSNet, 

is the industry’s preferred approach 

until a robust alternative PvP solution 

can be developed. 

How is CLS helping the industry 

through other significant 

developments? 

As the financial market infrastructure 

in the FX market, we are ideally 

placed to help market participants 

solve industry challenges. One of 

the most recent examples of this 

is the work we are doing with our 

settlement members and central 

counterparties to explore how we can 

support them in optimizing capital 

as part of the industry transition 

to the standardized approach for 

counterparty credit risk (SA-CCR). 

Irrespective of whether our settlement 

members opt for the creation of 

bilateral overlay trades to flatten their 

currency deltas, as is currently the 

case, or opt in the future to centrally 

clear certain tranches of outright FX 

trades (such as forwards or swaps), 

we will play a key role in supporting 

members as the FX ecosystem 

evolves. 

Our primary focus is to ensure that FX 

flows are optimally and safely settled, 

regardless of which method of capital 

optimization market participants 

choose. This is an ongoing dialog with 

the industry that will continue for the 

next couple years. 

Underpinning all our work at CLS 

is a best-in-class resilience and 

operational posture to enable us to 

deliver optimal solutions to public 

policy and industry challenges. As 

the critical service provider to the FX 

market, we require resilience above 

all else – across our infrastructure, 

controls and cybersecurity. 

We have invested in the technology 

underpinning our services and now 

have one of the most sophisticated, 

resilient, scalable and flexible 

post-trade technology platforms 

across global FMIs. It enables us 

to evolve our post-trade offerings 

more easily to meet the needs of 

the FX market, while ensuring we 

continue to meet the highest levels of 

operational resilience. 

1 

2022 Bank for International Settlements survey (BIS Survey); https://www.bis.org/statistics/rpfx22.htm 


Exploring the upside for 

Commercial Banking in FX 

By Niels van Daatselaar, Co-Founder and CEO of TreasurUp 

since the early days of this millennium. 

generation FX, for example based 

In 2000 both 360T and FXall entered 

on AI or smart analytics engines in 

the market and became very successful 

specialist magazines, websites and 

for large corporate flow, especially after 

social media. Even though these new 

2010. Many different brokers have also 

technologies are very interesting to 

entered the market at that time. During 

further optimize FX trading, they are 

the last few years, numerous Fintech 

usually geared towards institutional and 

companies have taken a slice of the pie 

rather professional corporate users with 

for FX. A lot of them combine this with 

dedicated treasury departments. On 

payments. 

the SMB client side, on the other hand, 

PRODUCT DEVELOPMENT 

Niels van Daatselaar 

Foreign exchange (FX) - the largest 

market globally in terms of daily 

volume - has been the bread and butter 

for decades for many banks. Most of 

this volume comes from institutional 

trading, but the corporate part 

contributes significantly when it comes 

These ‘new’ players have much to offer 

to SMBs: quick and easy onboarding, 

virtual accounts, sharp pricing, easy 

connectivity and most of the time 

nice online journeys. However, there 

are also things to overcome for these 

parties: having a narrower product 

offering, requiring companies to deposit 

collateral sometimes, not always 

having real bank accounts, a much 

there seems to be upside potential just 

around the corner. 

HOW CAN COMMERCIAL 

BANKING INCREASE ITS FX 

TOP LINE? 

Whether it would be through clients 

trading more because of better 

hedging or taking (back) some flow 

from the non-bank competition, banks 

have good playing cards to begin with. 

to margin revenues. 

lower credit rating than most banks 

Banks have the balance sheet, the 

and no (substantial) front office for 

payments accounts, the specialized and 

Next to that, corporate FX remains 

consultations and support. 

trained front office staff, the IT power 

a typical flow product and therefore 

and above all: the total set of financial 

‘door opening’ product for relationship 

When looking at the channels being 

solutions that SMBs require. 

managers and treasury advisors. The 

market for FX products has seen quite 

used - see the BIS graph below - 

one can conclude that single bank 

THE UPSIDE AREAS 

some developments for corporate 

platforms remain an important factor 

1. Cross-Border Payments 

small and medium-sized business 

in day-to-day FX trading. It also shows 

The seemingly small distance to the 

(SMB) users. During the last few 

that still, depending on the region, a lot 

payments journeys of SMBs as well 

years, banks have been seeking ways 

of FX trading is done by phone. This is 

as the Cash Management/Transaction 

to increase their FX competitiveness 

not just the case for institutional flow. 

Banking for the Markets team remain 

beyond pricing. The question arises: 

TreasurUp has learned that for example 

exception cases. Not many banks 

what strategies can banks implement 

in Latin America, certain parts of Asia, 

have integrated the worlds of FX and 

for improving their single bank FX 

Africa and Europe many FX Sales 

payments fully in a sense that they 

propositions? 

people in dealing rooms are still picking 

can provide client-specific spot rates 

WHAT HAPPENED TO BANK FX 

OFFERINGS? 

up the phone for plain vanilla spot or 

forward transactions. 

to payments now and in the future or 

on the back of outstanding forward 

contracts. Pre-validations and payments 

Banks have seen a lot of competition 

Banks where online FX has fully 

trackings are also not common in most 

entering the market for corporate FX 

matured are promoting their next 

offerings. 


PRODUCT DEVELOPMENT 

Rum reped qui dolest offic to volo voluptatur aute sumet magnati onsecta turiam non paria sequo illuptatenis ar 

1 

In brackets: change in percentage points since the 2019 Triennial. 2 Direct: trades not intermediated by a third party. Indirect: trades intermediated by a third party - either a voice broker or a 

third-party electronic platform. 3 Single-bank trading systems (eg Barclays BARX, Citi Velocity, Deutsche Bank Autobahn, UBS Neo). 4 Other direct electronic trading systems (eg direct electronic 

price streams). 5 Multi-bank dealing systems that facilitate trading on a disclosed basis or that allow for liquidity partitioning using customised tags (eg 360T, EBS Direct, Currenex FXTrades, 

Fastmatch, FXall OrderBook, Hotspot Link). 6 Electronic trading platforms geared to the non-disclosed inter-dealer market (eg EBS Market, Hotspot FX ECN, Reuters (Refinitiv) Matching). 

2. Workflow and Policy Support 

Many SMBs at some point introduce 

treasury policies and approval workflow 

for important financial processes 

like payments and hedging. Online 

Transaction banking propositions 

should properly cater for that. 

That includes offering easy-to-use 

configurations of these processes as 

they are targeted at SMBs. Next to 

that online platforms should tallow 

for sufficient flexibility based on the 

principle of 80/20: 80% of the bank’s 

SMBs should be able to configure their 

particular way of working as one of 

the default settings that the bank is 

offering. 

3. Automation and Bookkeeping 

Connectivity 

The early adopter SMBs would want 

to fully automate their repetitive 

operational financial processes like 

payments and hedging. For that, 

fetching the appropriate data from the 

SMB’s bookkeeping/ERP platform is 

crucial. It goes without saying that the 

SMB would first need to be convinced 

by the bank that the value offered with 

these automation services supports 

the efforts to approve and establish a 

connection between the company and 

the bank. And this connection should 

be easy, fast and seamless from the 

SMB’s perspective. 

4. Liquidity Management and 

Forecasting 

Most journeys start with insights into 

current cash positions: per entity, per 

bank, per account, and per currency. The 

logical next step is to help a company 

with proper forecasting. Most online 

Commercial Banking offerings do not 

include cash flow forecasting and if 

they do it is close to retail forecasting: 

extrapolating account balances. 

The next big thing would be to link the 

bank’s Term deposits and credits & loans 

products to these forecasts in order to 

facilitate solutions for upcoming cash 

shortages and to better manage their 

excess liquidity. 

ONLINE INTEGRATION; 

INTERNAL COOPERATION 

Single bank FX propositions will not 

result easily in large top line growths 

when made more sophisticated in 

terms of complex AI, complex products 

and lots of bells and whistles. Instead, 

banks could earn more on single bank 

FX if it reflects the SMB journeys a 

lot better. That means embedding FX 

in logical total journeys, for example 

with payments, trade finance and 

forecasting. This also requires the 

front office to educate clients about 

market practice treasury processes in 

combination with the bank’s integrated 

online offering. 

In short, most banks have a substantial 

upside potential for FX business. For 

professional-institutional and large 

corporate markets - this may lean on 

further sophistication of FX products 

and markets. For the SMB markets, the 

upside mainly lies in cross-functions 

with closely related products and 

business lines like Cash Management 

but also automation and full workflow 

support. A good starting point for that 

might be bank product lines working 

more intensely together in order to 

better reflect how SMBs work. 




Stacking up the USPs 

of FX ECNs: 

Product diversity, flexibility and 

customisation help them to remain 

a compelling proposition for many 

market participants. 


FX 

ECNs 




Nicholas Pratt examines why the future of FX ECNs 

remains bright for those willing to grasp the opportunities. 

Nicholas Pratt 

Despite the results of recent industry 

surveys showing a decline in the 

volume of trades executed via ECNs, 

the value of the ECN proposition 

remains strong and compelling 

for many FX market participants, 

according to ECN providers. Semiannual 

FX turnover reports from the 

both the US and UK FX Committees, 

published in October 2022 

showed that ECNs’ overall share of 

execution volume dropped and was 

outperformed by voice brokers. So 

how have ECNs responded to this 

data? 

“FX liquidity is still quite fragmented 

and all-to-all trading is getting more 

relevant with both buy-side and sellside 

participants needing to maintain 

a balance between best execution 

and profitability,” says Devang 

Bhatia, chief commercial officer at 

SGX CurrencyNode, an anonymous 

Asian FX trading venue, operated by 

Singapore Exchange (SGX Group) and 

hosted in Singapore’s SG1 data centre. 

“ECNs that can demonstrate unique 

liquidity especially in emerging market 

(EM) currencies like the Chinese 

renminbi (CNH), Indian rupee (INR), 

Indonesian rupiah (IDR), South Korean 

won (KRW), Taiwan dollar (TWD), Thai 

baht (THB), Philippine peso (PHP) and 

Singapore dollar (SGD), have all gained 

substantial volume and market share. 

ANONYMOUS TRADING 

SGX CurrencyNode was set up 

in 2022 to target clients looking 

for anonymity, deep liquidity, cost 

efficiency, consolidated relationships 

and price discovery. “Our clients 

have found ECNs to be cost effective 

as a single source of connectivity, 

therefore leading to reduced analytical 

effort and cost versus grappling 

with analytics across many bilateral 

connections,” says Bhatia. Since 

obtaining its Regulatory Market 

Operator (RMO) licence from the 

Monetary Authority of Singapore 

(MAS) in September 2022, its business 

has been on a healthy trajectory, with 

over 400% increase in its average daily 

volume between Q4 2022 and Q1 

2023. 

“At SGX CurrencyNode we 

systematically and actively optimise 

flows to minimise market impact. 

Hence we are more adept at 

developing user-friendly algos that 

distribute orders in an aggregated 

liquidity environment than a client 

needing to balance between using 

conventional banks’ algos on their 

own,” adds Bhatia. 

Another market trend impacting 

the use of ECNs is the growing 

demand for NDFs – for example, the 

increased volume in FX futures for NDF 

currencies has made electronic pricing 

more fungible between ECN and listed 

markets, thereby giving a boost to 

the growth of NDF trading on ECNs. 

“Managing credit effectively, having 

the ability to switch between OTC and 

Futures and having solutions that can 

reduce credit utilisation is important,” 

says Bhatia. 

A case in point for fungibility is SGX 

FlexC futures which CurrencyNode 

offers customers who want to discover 

and match OTC pricing, but for credit 

optimisation, converts the OTC trade 

into an exchange cleared futures 

contract – making conventional OTC 

NDF fungible with FX Futures. Another 

key capability that SGX CurrencyNode 


Stacking up the USPs of FX ECNs 

“ECNs that can demonstrate unique liquidity especially in 

emerging market currencies have all gained substantial 

volume and market share,” 

client expectations for RTTs, fill rates, 

market impact and other factors and 

processes.” 

Technology is another factor. 

period, tenors and onshore pricing 

“Access to technology in the FX 

is often difficult to achieve without 

market has become mainstream and 

significant technology enhancement. 

client sophistication has grown. An 

On the back-end, settlement, credit 

increasing number of players are 

and STP fluency also require new 

active in the electronic ECN space,” 

technology to facilitate the workflow 

says Norton. “There is also a rise 

across regional liquidity providers 

in demand for meaningful data in 

and global clients. These can all be 

the FX market. Data derived from 

managed seamlessly by an ECN that 

an ECN’s ecosystem is extremely 

continually invests in technology,” says 

valuable and often indicative of larger 

Bhatia. 

market trends. It can also be used to 

Devang Bhatia 

Some ECNs are also benefitting from 

offer clients granular data to support 

their decision making and pool 

working with clients and market- 

curation,” he states. 

has developed is synthetic NDS where 

makers to avoid liquidity abuse and to 

customers are able to carry out 

create custom liquidity pools to ensure 

New trading styles such as 


the first leg with NDF/Spot and the 

second leg with futures by leveraging 

exchange-listed products’ synergies. 

More work needs to be done though, 

to improve the ECN model when it 

comes to market data distribution and 

order routing transparency. “ECNs 

possess an immense wealth of data, 

positive yield for the LP and optimal fill 

rates for clients. “The CurrencyNode 

liquidity management team works 

very closely with LPs to complement 

the prices that get streamed to market 

participants, ensuring that there is no 

duplication of liquidity for the client 

nor is there any skew leakage for 

the LP,” says Bhatia. “With constant 

algorithmic trading where minimising 

market impact and providing trading 

analytics are key components have 

also played into the strengths of FX 

ECNs, says Norton. “Market impact 

has become increasingly important 

for clients assessing the overall cost 

of execution. Price and spreads 

are no longer the only measure 

however there is a lot of investment 

recalibrations, optimised liquidity 

of execution quality. For algos 

needed to store and distil, analyse, 

is made available on the system for 

specifically, market impact is just one 

customise and present the data to 

participants to consume.” 

factor of intelligent execution. For 

be sufficiently rich for consumption 

by varied sets of participants,” says 

DIVERSIFICATION APPEAL 

many algos, undetected trading is key 

to not only avoid market impact, but 

Bhatia. “This is one area where we 

According to Clinton Norton, Global 

also avoid price recycling. The 

see a lot of potential in creating new 

Head of Sales at Euronext FX, 

customizable nature of ECNs allows 

partnerships with specialists in data 

there are a number of reasons as 

these algos to execute in highly vetted 

and analytics.” 

to why the ECN model remains a 

environments.” 

compelling proposition for FX market 

ECNs are also looking to attract new 

participants. One of the primary 

Another driver has been the growth 

clients by investing in new technology 

reasons is the flexibility. “ECNs are 

of the NDF market. “As NDF trading 

and catering towards more niche 

able to provide an advanced level of 

becomes more mainstream gaps 

currencies supported by regional 

sophistication in speed, technology 

in liquidity are closing, spreads are 

liquidity. “Sourcing regional EM liquidity 

and functionality. The flexibility in 

improving and NDFs are traded 

and aggregating it usually requires 

trading solutions and diversification 

more strategically as simply another 

highly bespoke technology that is able 

is the appeal,” says Norton. “As 

product and not merely for hedging 

to cope with the numerous nuances for 

opposed to open-to-all Central 

purposes. NDF trading has followed 

each country’s currency,” says Bhatia. 

Limit Order Books (CLOBs), the ECN 

the path blazed by Spot FX trading 

experience is completely customisable 

with increasing electronification. 

“The congruency of things such as 

for clients. At Euronext FX, we curate 

This allows for faster, more dynamic 

terms trading, fixing dates, cut-off 

anonymous pools of liquidity to meet 

execution of orders and has the 


Your gateway to the global FX 

ecosystem, empowered with 

cutting-edge technology 

SGX FX brings innovation to the global FX 

ecosystem - from accessing wide liquidity pools in 

both OTC and Futures markets, to customising 

cutting-edge workflow solutions for the buy and 

sell-side, our comprehensive offerings are designed 

to help you stay ahead of the curve. 

Singapore Exchange 

sgx.com 

SGX Group Companies: 


Stacking up the USPs of FX ECNs 


“ECNs are able to provide an advanced level of sophistication 

in speed, technology and functionality. The flexibility in 

trading solutions and diversification is the appeal,” 

Clinton Norton 

potential to reduce costs compared to 

traditional futures trading,” says Norton. 

TECHNOLOGY AND 

FLEXIBILITY 

To maintain a competitive edge and to 

attract new clients, ECNs must evolve in 

technology and flexibility, says Norton. 

“Speed and technology are at the core 

of Euronext FX. Our development team 

allocates time and resources to ensure 

the ECN operates at peak performance. 

We are proud of our platform latency 

with order-to-ack and quote-to-feed 

latencies sub 25 milliseconds. This 

is particularly important in times of 

volatility where price discovery tends to 

occur on our ECN first,” says Norton. 

With so many execution venues 

available, ECNs need to be nimble 

and flexible in what they offer new 

and existing clients, says Norton. This 

means a greater focus on customisation 

– something that Norton believes 

Euronext has demonstrated with two 

of its most recently developed offerings 

– 1. P&L Control which provides realtime 

P&L monitoring and subsequent 

interaction management for liquidity 

providers and 2. Full Amount Lock-In 

which routes back to back trades to the 

same liquidity provider for a set period 

of time to allow time for hedging time 

and avoid impact. 

A global footprint also attracts new 

clients, says Norton. “Euronext FX, 

together with Euronext Markets 

Singapore, operates matching engines 

in New York, London, Tokyo and 

Singapore, each managed by local 

experts. Pricing in each matching 

engine is different and for niche 

currencies, pricing is ameliorated by 

local makers with natural interest.” 

Liquidity management has also become 

a source of benefit for ECNs in terms 

of avoiding liquidity abuse and creating 

custom liquidity pools. “Optimal fill 

rates and positive liquidity provider 

yield vary from client to client,” says 

Norton. “Even for a single client, 

these thresholds can be different for 

specific sessions, depending on their 

strategic P&L outlook.” 

Euronext FX’s liquidity management 

team works with takers and 

makers to curate custom pools 

where counterparty performance 

matches client expectations, says 

Norton. “Our liquidity managers 

meet with clients regularly to 

manage trading interactions and new 

opportunities. To support clients in 

their own pool curation, we deliver 

granular data per tag per currency pair.” 

Euronext FX also has in place several 

safeguards against liquidity abuse, says 

Norton. 

“These include speedbumps for 

consecutive rejections, and automated 

protections around fill rates where 

we halt trading from LPs when they 

breach the required fill rate of the 

end client. We recently rolled out Full 

Amount Lock-In to avoid rapid fire 

and sweeping, and P&L control for 

makers to automatically limit intraday 

losses per client,” he adds. 

In contrast to the data from US and UK 

FX Committees showing a decline in 

execution volume for ECNs, Euronext 

FX has seen its activity increase. In 

2022, its average daily volume (ADV) 

grew by 17% year-on-year while ECN 

ADV is up by 4% from the period 

between Q4 2022 and Q1 2023. 

Norton attributes this to a combination 

of new clients and special attention to 

growth areas such as firm, full amount, 

and SkewSafe trading. 

EXPANDING PRODUCT RANGE 

However, more can be done to make 

the ECN model more attractive by 

developing new technology, enhancing 

liquidity, expanding the product range 

and aligning with the FX Global Code, 

says Norton. 

“At the start of 2023, our new FX Global 

Code policy came into effect whereby all 

taker sessions were defaulted to Codeonly 

liquidity unless a taker specifically 

opts out. We allowed the taker to make 

their own liquidity choice based on 

enhanced data we provided. As a result, 

by the end of Q1, +90% of platform 

volumes were generated by Codesignatory 

LPs compared to 78% in Q3 

2022,” says Norton. 

“While Euronext FX has no immediate 

plans to go beyond FX, we have 

expanded our product offering with 

NDFs, first launched in Singapore, and 

now available in London,” says Norton. 

“Through Euronext Markets Singapore, 

clients can interact with local and 

global liquidity in Asian NDF pairs. We 

have also recently expanded into the 

quantitative data space with the launch 

of our FX Market Flow, which offers 

subscribers daily metrics that reflect 

market trends. metrics are designed to 

be used by quant funds to assist in the 

implementation of overnight trading 

strategies.” 


NDF trading at 

Euronext Markets 

Singapore 


Euronext FX is a leading ECN for Spot FX and Precious 

Metals, as well as NDFs through its Singapore 

subsidiary Euronext Markets Singapore. Powered by 

award winning FastMatch ® technology, Euronext FX 

with Euronext Markets Singapore has matching engines 

in London, New York, Tokyo and Singapore. This bestin-class 

technology is leveraged to deliver flexible 

execution solutions and quantitative market data 

products. 

Clients can trade FX NDFs through its subsidiary, 

Euronext Markets Singapore, a Regulated Market 

Operator (RMO) licensed by the Monetary Authority 

of Singapore (MAS). As the first FX ECN to launch in 

SG1, Euronext Markets Singapore enables clients to 

access local Asia-centric trading partners with reduced 

latency. NDF liquidity pools are locally managed, 

leveraging the same unique functionalities and 

FastMatch ® technology as in our Spot market. 

KEY FEATURES 

• NDF Currencies Available 

• CNY, IDR, INR, KRW, PHP, TWD, BRL 

• 1 month tenor, IMM, and BMF for BRL 

• Customised liquidity pools: Including firm and last 

look, anonymous and semi-disclosed, sweepable 

and full amount, SkewSafe 

• Full range of order types including market and limit 

orders, pegged algos and icebergs 

• Unparalleled speed powered by award winning 

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What steps are crypto 

exchanges taking to meet 

the needs of institutional 

traders and investors? 

e-Forex spoke with Jenna Wright, Managing Director, LMAX Digital, one of the industry’s leading 

trading venues, to discuss some of the issues that are likely to influence and shape how crypto 

exchanges continue to evolve to meet the needs of institutional clients. 

VIEWPOINT 

Our institutional client base recognises 

that the global crypto currency 

market is at a nascent stage of its 

development. These firms need a 

legitimate and regulated venue on 

which to acquire and trade crypto 

currencies securely with high quality, 

deep institutional liquidity. That’s 

ultimately why we launched LMAX 

Digital, informed by our knowledge 

and depth of experience in the FX 

market. 

Importantly, it also means acting as 

an established and regulated market, 

following best practice in the areas 

of KYC, AML, security, compliance 

and risk management. LMAX Digital 

was launched to allow institutional 

participants to enter the crypto 

market through a regulated and 

safe environment. This remains our 

focus as more institutions move into 

the market and hold more capital in 

cryptocurrencies. 

Jenna Wright 

What work have leading 

exchanges undertaken to satisfy 

the wishlists of their clients 

and provide secure trading 

environments? 

Institutional requirements when 

trading crypto are very much the same 

as when trading fiat currencies. Of 

paramount importance to institutions 

are low latency, accurate price 

discovery and the ability to trade with 

like-minded participants. Leading 

exchanges recognise these needs 

and have built institutional grade 

infrastructure, with the reliability of 

100% uptime, and having effective 

risk management and controls. 

How are crypto exchanges going 

to make their venues even more 

attractive to institutional players? 

Meeting the needs of institutional 

clients requires taking the things we 

have learned from our history in FX 

and established capital markets and 

applying them to cryptocurrencies. 

There are also aspects of developing 

crypto market structure that have 

great potential to benefit traditional 

finance; take 24/7 trading for example. 

The key is having a pragmatic 

approach that brings together the best 

elements of both. In practice, for us, 

this means delivering the same quality 

and robust technology institutional 

clients have become accustomed to 

and applying it to a new asset class. 

What impact will increased 

regulatory oversight of the crypto 

markets have on institutional 

exchanges? 

Global regulators have turned 

more attention to crypto than ever 

before – rightly cracking down on 

violations, and enacting standards 

to protect consumers, reduce market 

fragmentation and participation by 

bad actors. We fully support regulation 

coming to the industry as it protects 

consumers, creates stability and 

harvests innovation – conditions that 

institutions look for. 

Regulation takes time but the progress 

and focus on it is encouraging. 

We would like to see policymakers 

working with the industry to ensure 


VIEWPOINT 

frameworks are robust, effective, and 

under the supervision of respected 

regulatory bodies. Once a regulatory 

framework is set, institutions will have 

clarity and can participate without 

fear of stepping out of line – clearly 

beneficial for exchanges. 

How do you see the client mix of 

digital asset exchanges changing 

as professional investors increase 

their crypto activity? Will any 

category of firm be likely to 

dominate? 

Currently, the crypto market is 

predominately retail, with the 

prop trading firms and institutions 

who make markets in retail crypto, 

dominating institutional trading 

venues and utilising those venues to 

exit risk. However, as the tokenisation 

of real-world assets continues to 

gather pace, that will allow more 

efficiency of capital in the years ahead, 

so we expect digital assets to become 

de rigueur and more institutions to get 

involved – for example asset managers 

and banks. 

The lack of a credit mechanism or 

credit intermediation within the 

institutional markets for banks to 

offer their clients crypto trading credit 

remains a challenge that also needs 

to be addressed in order to unlock the 

full ability of institutions to participate. 

What datasets (historic and/or 

real time) do you feel digital asset 

exchanges need to provide to 

accommodate institutional clients? 

Access to accurate and real time 

data is paramount when trading in 

any asset class and cryptocurrencies 

are no different. Real time, precise, 

reliable market data is the foundation 

of efficient asset pricing and valuation 

that ensures a robust and orderly 

marketplace. At LMAX Group we will 

always take lead, which is why we 

Bitcoin can be a valuable risk sentiment indicator for investment management professionals 

became the first market data exchange and increasing competition between 

contributor to the Pyth Network, the regulated, positive actors can only 

decentralised financial market data be a good thing. For the asset class 

distribution network in 2021. We also to continue to mature, institutions 

provide our crypto market pricing need supportive regulation to provide 

data via crypto indices such as CF certainty to all sides of the trade, 

Benchmarks and Coindesk Indices to provide growth and innovation within 

enhance market structure and facilitate the market and ultimately foster 

accurate price discovery. 

healthy competition. 

Bitcoin can be a valuable risk 

What other factors are likely to 

sentiment indicator for investment shape how institutional crypto 

management professionals. Crypto exchanges evolve over the next 

markets trade 24/7, allowing investors few years? 

to adjust risk amid unexpected macro 

events even when other markets What we’ve seen in the past year is 

are closed. Bitcoin’s liquidity offers a a clear flight to quality within the 

unique opportunity to use BTC as a market. This will benefit the industry 

hedging instrument. BTC can be used as a whole, providing an opportunity 

directly to readjust risk and indirectly to focus less on personalities and more 

as a proxy to gauge how markets will on cutting-edge technology and the 

react to significant events. 

long-term benefits this asset class can 

bring to capital markets and the future 

Do you expect to see more 

of finance. 

institutional crypto exchanges 

being launched and what issues Ultimately, what we expect to see 

may influence whether the market in the next few years is exchanges 

reaches a saturation point? 

continuing to develop their products 

and invest in increasingly lower 

At LMAX Group, we welcome 

latency, robust technology enabling 

competition from other market their customers to react to market 

participants and view it very much as events faster. Increasing use of such 

a tide that can lift all boats. At a time technology will continue to compress 

of upheaval in the development of the spreads leading to less arbitrage 

cryptocurrency market, encouraging amongst exchanges. 



Institutional digital assets: 

What are the evolutionary 

lessons from e-FX? 

A mature market for institutional digital assets is already a matter of when not if. Many are 

drawing parallels with the evolution of FX but predicting far faster progress. Andy Webb, editor 

of the Institutional Digital Assets portal, talks to three prominent industry practitioners to gain 

their insights on how institutional digital assets will evolve. 

Andy Webb 

EVOLUTION AND SHAPING 

FACTORS: MIRRORING FX? 

Digital assets are already emulating 

the evolution of FX in the institutional 

context. Perhaps the main difference 

is speed, with many commentators 

expecting the transition to an 

electronic market for institutional 

digital assets to be considerably 

quicker than it was for FX. “For 

vanilla spot trading of digital assets 

such as crypto we are already there,” 

says Lars Holst, CEO and founder 

of GCEX. “However, for derivative 

instruments and fractionalisation we 

may see a period of manual or voice 

negotiation.” 

Despite the similarities, an important 

distinction between digital asset 

trading and FX is the way that credit 

and settlement are handled. At 

present, digital exchange trading is 

conducted on a pre-fully-funded basis, 

which is not feasible for long-term 

sustainable institutional-scale market 

activity. If an institution wants to 

trade on ten different venues today, 

it has to try and predict its notional 

exposure on each one and pre-fund 

them all, which is simply untenable. 

The emergence of specialist credit 

intermediaries to address this is also 

potentially problematic, because they 

are unlikely to want to assume all the 

operational settlement risk associated 

with digital assets. 

Where we see a lot of similarities 

between the two markets is the role of 


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Institutional digital assets: What are the evolutionary lessons from e-FX? 


“I think we could see huge growth in institutional activity 

over the next three years, because everybody wants a new 

asset class to be exposed to...” 

intermediaries. “In the OTC FX market, 

intermediaries like banks and brokers 

play a critical role of enabling their 

customers to achieve their business 

goals – hedging, risk management, 

or speculation. As these customers 

enter the digital asset class, banks and 

brokers need battle-tested workflow 

automation technology to continue 

to serve them; this evolution is the 

driver behind the tremendous demand 

we are seeing for Integral Digital 

technology,” says Sanjay Madgavkar, 

CSO of Integral. A further factor 

shaping the market is regulation. 

“Governments and regulators around 

the world are becoming more focused 

on developing rules and guidelines 

to govern digital asset trading,” says 

Vinay Trivedi, COO of MaxxTrader. “We 

expect to see increased oversight in 

areas such as AML/KYC compliance 

and fraud prevention.” 

This regulatory influence will probably 

also favour the use of standardised 

derivative products, such as futures, 

but given their proven utility with 

hard to settle assets, non-deliverable 

forwards (NDFs) also look likely to 

play a part. Some institutions are 

also trying to create baskets of digital 

assets that can be traded as an asset 

class in their own right. 

Sanjay Madgavkar 

Elsewhere, institutions are already 

looking for the same sort of full suite 

prime brokerage services they currently 

have for FX. Apart from robust 

clearing infrastructure, significant 

balance sheet will also be required to 

support serious institutional volume. 

RIGHT PLATFORM, RIGHT 

SPEED 

Digital assets are effectively following 

the inverse of FX’s timeline. In the 

early days of FX, commercial demand 

from corporates and asset managers 

meant that institutional FX activity led 

the way, with retail activity following 

later. In the case of digital assets, retail 

has been the first mover, so as yet 

there are none of the institutionalgrade 

trading venues found in FX. 

While there are listed futures contracts 

available for a few cryptos, institutions 

are ultimately looking for a far 

broader range of digital assets with 

appropriate liquidity and infrastructure 

resilience. 

In the short term, this means that 

latency is not much of an issue, given 

the fragmented and retail nature 

of the industry. However, once 

institutional traders start moving large 

volume this will change and (as for 

FX) the emergence of low-latency 

connectivity services is likely to have 

a transformational impact on market 

access. 

DATA, ANALYTICS AND 

LIQUIDITY MANAGEMENT 

The institutional trading of digital 

assets will inevitably drive demand 

for associated data and analytics. 

As in FX, quants will require data for 

model building and calibration, risk/ 

compliance functions will need it to 

monitor exposures, while regulators 

will want it for monitoring capital 

ratios. In anticipation of this demand, 

companies such as GCEX, MaxxTrader 

and Integral already include 

comprehensive data and analytics for 

digital assets in their product offerings. 

Analytics and associated technology 

also have an important role to play 

if enhanced liquidity management 

of digital assets is to emulate the 

efficiencies achieved through flow 

aggregation in FX. Again, entities 

servicing this space are already using 

similar or identical FX technology to 

achieve this. “Obviously there are 

some tweaks but it is essentially the 

same,” says Lars Holst. “Dealing with 

things such as airdrops makes it a 

little more complex as they don’t have 

an exact counterpart in conventional 

assets.” 

Ultimately, proven FX technology - 

such smart order routing - will provide 

access to a larger pool of digital asset 

liquidity, which will make trading more 

efficient and reduce transaction costs. 

Coupling this with institutional-grade 

Vinay Trivedi 

“Regulators may impose stricter rules on HFT, and market 

participants will need to adapt their strategies to new 

liquidity pools and market structures,” 




Institutional digital assets: What are the evolutionary lessons from e-FX? 

“In our case we are focusing on the Gulf Cooperation Council 

countries, where we find regulators very welcoming and 

open to business,” 

risk management solutions will also 

help deliver the requisite stability to an 

institutional digital asset marketplace. 

HFT AND MICROSTRUCTURE 

Some institutional market makers are 

already active in digital assets, typically 

the same names already prominent 

in FX. “They already have excellent 

technology, which is key to their 

profitability, but they will still need 

prime brokers because they can’t have 

trading lines with everybody,” says 

Sanjay Madgavkar. 

Nevertheless, the growth of HFT 

activity generally will be influenced by 

various factors, including regulatory 

oversight, market structure, data 

quality, and platform security. Some 

see regulation and analytics having 

a major influence. “Regulators may 

impose stricter rules on HFT, and 

market participants will need to adapt 

their strategies to new liquidity pools 

and market structures,” says Vinay 

Trivedi. “Access to high-quality data 

and analytics will also be essential if 

participants are to be able to monitor 

and maintain profitability.” 

Lars Holst 

A related question is how market 

microstructure will evolve. At present, 

it seems probable that it will diversify 

across OTC and listed venues, plus 

new platforms catering for specific 

market segments. However, one 

reaction to CEFI failures has been 

growing trading activity on DEFI and 

P2P networks, which might potentially 

result in a fragmented market 

structure. This is not necessarily an 

insuperable problem if aggregators 

and SOR providers are able to provide 

seamless order book access across 

CEFI and DEFI. 

GROWTH YES, BUT WHERE? 

Rapid growth in the market for 

institutional digital assets is seen 

as a given by many participants. “I 

think we could see huge growth in 

institutional activity over the next 

three years, because everybody wants 

a new asset class to be exposed to, 

especially as some of the correlations 

break down,” says Sanjay Madgavkar. 

“At present, digital assets seem 

strongly correlated with a “risk on” 

environment, but ultimately they 

could become more of a safe haven - 

especially if inflation continues to rise 

and there is more government fiscal 

and monetary uncertainty.” 

However, where that growth will 

concentrate geographically remains 

an intriguing question. Regulation 

again appears a strong factor, with 

many commentators drawing parallels 

with how regulators have influenced 

the growth of retail FX trading. Some 

have found the geography of their 

business model heavily influenced 

by the attitude of regulators. “In our 

case we are focusing on the Gulf 

Cooperation Council countries, where 

we find regulators very welcoming 

and open to business,” says Lars Holst. 

“For us, Dubai is the hub to south-east 

Asia and Africa, plus we can hire the 

necessary talent there. Longer term 

I definitely think we will see strong 

growth in Asia.” 

Various fundamental factors are seen 

as key to Asia’s growth potential 

for institutional digital assets. These 

include a tech-savvy population, 

an established financial industry, 

and supportive regulatory and 

governmental environments. 

This is one reason some do not see 

digital assets following the same 

geographic maturity cycle as FX. 

“APAC is taking a lead over some 

major developed markets,” says Vinay 

Trivedi. “This is reflected in broad user 

adoption, plus new blockchain and 

tokenization-based use-cases, new 

ventures, and traded volumes.” 

CONCLUSION: LESSONS TO 

LEARN 

The institutional market for digital 

assets has the opportunity to learn 

from the mistakes and challenges of 

both institutional FX and retail digital 

assets. Robust risk management 

and settlement procedures, plus the 

development of scalable solid trading 

infrastructure are obvious examples. 

With necessary adaptation, much of 

the technology - such as cloud - that 

is increasingly used in institutional 

e-FX can be (and is being) redeployed. 

Elsewhere, best market practices (such 

as the FX Code of Conduct) can also 

be imported to improve trust and 

reduce friction. 

However, institutional interest in 

Digital Assets will also drive the need 

for significant changes to something 

that does not have a counterpart in 

the FX market – the blockchain. Higher 

capacity and lower cost blockchain 

technology will be required to support 

institutional activity generally, but also 

to facilitate innovation such as the 

use of smart contracts to support 

bilateral trading. 



64 MAY 2023 e-FOREX 

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