e-Forex-May-23

EXPERT OPINION
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.
MAY 2023 e-FOREX 35