e-Forex-Nov-23

transforming global foreign exchange markets 

e-FOREX 

e-forex.net NOVEMBER 2023 

TRADING OPERATIONS 

Exploring next generation 

FX analytics 

REGIONAL E-FX 

PERSPECTIVE 

Taking a closer look at 

MENA FX 

FX ON EXCHANGES 

A story of growing demand 

and product development 

TREASURY 

AUTOMATION 

How technology is 

solving pressing needs 

TRADERS WORKSHOP 

Achieving ultra-low latency 

trading infrastructures 

COVER INTERVIEW 

ERIC DONOVAN 

and his Institutional FX team at StoneX Group 

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2 NOVEMBER 2023 e-FOREX

Welcome to 

e-FOREX 

transforming global foreign exchange markets 

November 2023 

Our regional e-FX perspective report in this edition focuses on 

the MENA region where the electronification of FX continues at 

pace along with growing demand for increasingly sophisticated 

fintech amongst financial market participants. A mixture of 

progressive regulatory environments and policies which have 

relaxed restrictions on foreign ownership of assets are attracting 

more foreign investors. Although electronic markets are firmly 

established in larger Middle East economies, in some regions 

e-trading is still relatively new so there remains enormous growth 

potential and opportunities for e-FX over the next few years 

which we will be following closely. 

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 

Tim Hendy 

tim@thstudio.co.uk 

Web Manager 

This month our trading operations feature is exploring FX analytics 

and why data and analytics now go hand in hand in helping 

to constantly reshape the execution process, making it clearer 

and more transparent. Demand is growing for high quality, 

independent data and with the link between post-trade data and 

pre-trade analytics for decision-making so important, it’s easy to 

understand the efforts that are underway to move data from a 

post-trade environment to a pre-trade one. The arrival of AI and 

ML are also likely to shake up and improve the task of execution 

analysis but their ultimate success in doing this is likely to depend, 

once again, on the quality of the data that is available to them. 

Building an ultra-low latency FX trading infrastructure is not an 

easy thing to do and as we discover in our traders workshop 

feature in this edition it is only half the battle for trading 

firms where the real challenge lies in maintaining speed in 

the face of multiple potential sources of delay. With that in 

mind we explore some of the specific factors that can impact 

latency and how use can be made of a number of analytical 

toolsets that can help firms monitor the state of their trading 

infrastructures. The takeaway lesson seems to be that enabling 

ultra-low latency trading is an ongoing process and if you 

decide to work with a third party provider to help you do it 

choose one that really understands the intricacies of this type 

of unforgiving trading operation. 

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

Charles Jago, Editor 

NOVEMBER 2023 e-FOREX 3

CONTENTS 

November 2023 

CONTENTS 

Saeed Amen 

TradeTech FX 

Eric Donovan 

e-Forex Interview 

Stephan von Massenbach 

FX Swaps 

Vivek Shankar 

FX Analytics 

Nicholas Pratt 

e-FX in MENA 

Paul Golden 

Ultra-low latency FX 

RECENT EVENT 

14. TradeTech FX 

Saeed Amen provides some 

takeaways from the recent 

TradeTech FX event in Paris in 

September. 

TRADING 

OPERATIONS 

20. Next generation FX analytics: 

Bringing transparency and more 

to the FX execution process 

Vivek Shankar explores the 

increasing use of data analysis 

toolsets in FX and how they are 

likely to evolve further. 

REGIONAL E-FX 

PERSPECTIVE 

32. Electronification rising amid 

turbulence: Taking a closer look 

at the MENA FX trading picture 

The prevailing e-FX story across the 

MENA region is one of increasing 

electronification of FX coupled with 

increasing fintech sophistication. 

Vivek Shankar investigates the 

various issues at play. 

E-FOREX INTERVIEW 

40. With Eric Donovan, Global 

Head of Institutional FX at 

StoneX Group. 


48. FX on the Exchanges: Demand 

grows while work continues to 

launch new products. 

Nicholas Pratt explores some of 

the trends in the listed FX trading 

world and what steps leading 

venues have been taking to attract 

new clients and launch new FX 

products. 

ASK A PROVIDER 

56. FX Swaps – The only 

constant is change 

e-Forex speaks with Stephan von 

Massenbach, CRO at DIGITEC, about 

the numerous changes that are 

taking place in the FX Swaps market. 

SPECIAL REPORT 

58. Corporate treasury 

automation: How technology is 

solving pressing needs 

Vivek Shankar finds out more 

about why treasurers now need 

automation more than ever. 

NETWORKS, 

HOSTING & 

CONNECTIVITY 

66. Crossing the Security 

Rubicon: How MSPs are 

hastening banks’ migration to 

the Cloud 

We look at the benefits of working 

with a dedicated financial services 

cloud provider. 

TRADERS 

WORKSHOP 

68. Achieving and maintaining 

an ultra-low latency FX trading 

infrastructure 

Achieving ultra-low latency is only 

half the battle for trading firms. The 

real challenge lies in maintaining 

speed in the face of multiple 

potential sources of delay and 

other challenges as Paul Golden 

discovers. 

COMPANIES IN THIS ISSUE 

A 

AbbeyCross 

B 

Banorte 

Beeks 

Bloomberg 

C 

Centroid Solutions 

Citi 

CLS 

CME Group 

Cobalt FX 

D 

DIGITEC 

p37 

p8 

p66 

p27 

p53 

IFC 

p61 

p52 

p13 

p56 

E 

Edgewater Markets 

Equiti 

Eurex 

F 

FairXchange 

Finalto 

FXCM 

FXSpotStream 

H 

HSBC 

I 

ION 

Integral 

IPC 

p10 

p65 

p49 

p6 

p71 

p51 

p11 

p33 

p29 

p17 

OBC 

K 

Kyriba 

L 

LSEG 

LMAX Group 

M 

Murex 

N 

NatWest 

New Change FX 

Nordea 

O 

oneZero 

P 

PLUGIT 

p59 

p34 

p6 

p8 

p10 

p25 

p59 

p19 

IBC 

R 

Reactive Markets 

Refinitiv 

S 

SGX 

smartTrade Technologies 

StoneX 

Swissquote Bank 

T 

360T 

TreasurUp 

W 

WBR 

p23 

p63 

p55 

p5 

p40 

p7 

p6 

p9 

p35 


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Payments 

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External 

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360T SUN extends API pricing to Asia Open 

360T’s Swaps User Network (SUN) has 

become the first platform to offer round 

the clock API pricing for FX Swaps, 

with Commerzbank now providing 

prices for G3 currencies and USD/ 

CNH from the APAC market opening. 

These developments are indicative of 

the growing interest from regional 

currency experts in providing pricing on 

360T SUN due to the improved price 

transparency and credit automation 

it offers. Leveraging an indicative 

streaming mid-rate that comes from 

360T’s award-winning Swap Data 

Feed (SDF), developed in partnership 

with DIGITEC, the platform provides 

grey-book risk exchange at mid-market. 

360T SUN also allows both GUI and API 

users to post resting bids and offers, 

using a choice of different automated 

Robin Nicholas 

credit models that remove the risk and 

latency of soft-matching. In addition, 

China Construction Bank (CCB), London 

Branch is also now providing liquidity 

in USD/CNH during the London trading 

hours in standard tenors out to 1 year. 

“Extending the API pricing on 360T SUN 

to provide continual interests across 

all market hours further enhances the 

value which the platform delivers to 

our global client base. Adding pricing 

for USD/CNH, meanwhile, is a strategic 

decision made on the basis of growing 

demand for Swap liquidity in this 

currency pair,” said Robin Nicholas, 

Head of Swap Product at 360T. 

NEWS 

LMAX Group granted RMO Licence from the MAS 

LMAX Group has announced that its 

subsidiary, LMAX Exchange Singapore, has 

received a Recognised Market Operator 

(RMO) Licence from the Monetary Authority 

of Singapore (MAS). The licence will 

enable the Group to offer Non-Deliverable 

Forward (NDF) trading in Singapore (SG1) 

and London (LD4). The launch of NDFs will 

allow clients to hedge their FX exposure 

against non-convertible currencies on a 

Central Limit Order Book (CLOB), delivering 

transparent price discovery, deeper liquidity 

and efficient market structure, streaming 

real-time, firm limit order market data to all 

participants. LMAX Group is committed 

to building an increasingly diversified 

offering to support growing demand 

from institutional investors for consistent, 

low-latency trading infrastructure. David 

Mercer, CEO, LMAX Group, said: “The 

David Mercer 

Monetary Authority of Singapore is among 

the most progressive and innovative 

regulators globally. We look forward to 

a continued, symbiotic relationship with 

MAS as we progress our expansion plans 

and build out our cross-asset product 

offering in the region for the benefit of local 

customers and the broader, vibrant, Asia 

Pacific market.” Receipt of an RMO licence 

recognises LMAX Group’s compliance with 

the principles set out by the regulator in 

accordance with international standards 

and best practices, whilst upholding 

stringent conduct around compliance, risk 

management and corporate governance. 

FXSpotStream joins the FairXchange ecosystem 

FXSpotStream has integrated Horizon, 

FairXchange’s, award-winning data 

analytics platform, enhancing real-time 

analytics for more precise trading 

execution and analysis. Horizon will 

help the Liquidity Management team at 

FXSpotStream manage relationships with 

both Price Takers and Liquidity Providing 

Banks. FXSpotStream clients will get 

unparalleled insights into their execution, 

helping them optimise their trading and 

strengthen their relationships with their 

liquidity providers. “FXSpotStream is one 

of the undisputed leaders in the provision 

of aggregation services, a unique 

technology provider that delivers crucial 

efficiencies to the FX trading community. 

We are delighted to be working with 

them to deliver our award-winning 

Guy Hopkins 

Horizon platform, bringing together 

FXSpotStream’s trading services with our 

market-leading, independent analytics,” 

says Guy Hopkins, CEO and founder of 

FairXchange. “We are always looking 

for ways to enhance our offering for 

both clients and LPs, and FairXchange’s 

Horizon platform will allow our clients 

to make informed decisions regarding 

their liquidity. FairXchange has developed 

a tremendous product and we are very 

excited to be working with them,” 

FXSpotStream Head of Sales, Antony 

Brocksom commented. 


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Banorte partners with Murex 

Grupo Financiero Banorte has enhanced experience significantly improved FX 

its FX derivatives trading client services, derivatives trading process efficiencies. 

powered by MX.3, Murex’s integrated “The Banorte transformation journey 

platform. The leading Mexican bank has involved many breakthroughs,” 

implemented a self-service to strengthen said Abraham M. Izquierdo, managing 

its corporate client business and further director, traded and treasury risks at 

its digitalization strategy. The goal of Banorte. “However, one of the most 

Banorte is to enable these clients to significant milestones has been the 

perform FX derivatives transactions self-service product offering. This 

by integrating MX.3 with an internal offering aligns closely with Banorte’s 

banking portal, Cambios Banorte digital strategy and meets the specific 

en Línea (CBL). The back end of 

expectations of our client base.” Banorte 

MX.3 facilitates complete self-service and Murex have a 12-year history of 

functionality to these clients, which collaboration. Banorte has expanded 

MX.3 use over this time, incorporating 

new modules and asset class coverage. 

In 2022, Banorte built a completely new 

XVA desk and revamped its PFE limits 

management. It chose Murex to support 

its risk and front office teams. 

Abraham M. Izquierdo 

NEWS 

Finalto embeds Gold-i’s MatrixNET into ClearVision 

Finalto has strengthened its longterm 

relationship with Gold-i, 

connecting Gold-i’s enhanced liquidity 

management platform, MatrixNET 

directly into its trading and account 

management system, ClearVision. Paul 

Groves, Finalto CEO explains, “Finalto 

and Gold-i have had a long-standing 

relationship dating back to the days of 

CFH Clearing. We are always looking 

at the best products and services 

to interact with our client base. The 

introduction of the Gold-i MatrixNet 

system backs our belief in offering 

only the best range of products and 

services to our clients. We look forward 

to continuing our working relationship 

with Gold-i over the coming years.” Tom 

Higgins, Gold-i CEO adds, “Key to our 

growth strategy for MatrixNET is for LPs 

Paul Groves 

to embed our software as an additional 

distribution and aggregation platform 

within their own technology. The 

simplicity and flexibility of our contract 

terms, combined with our robust and 

feature-rich technology for multi-asset 

liquidity distribution and aggregation, 

makes it a really attractive proposition 

for LPs. We are delighted that Finalto, a 

global market leader, is one of the first 

major LPs to license our new combined 

MatrixNET software. This installation 

of MatrixNET extends a strong and 

mutually beneficial partnership 

between Gold-i and Finalto.” 

Reactive Markets goes live with RFQ 

Reactive Markets has announced the 

addition of Request For Quote (RFQ) 

support on the service. RFQ functionality 

is made available across all channels 

(API/GUI/Mobile) and workflows, 

including upload and order staging 

functionality. “Our commitment to 

clients has always been to deliver the 

most cost effective, technology driven 

trading experience across all FX products 

and protocols. With the addition of 

RFQ and Order Staging functionality 

we provide the largest institutional 

clients with a technology solution 

that seamlessly plugs into any existing 

upstream and downstream trading 

processes” said Henry Durrant, Head 

of Business Development at Reactive 

Markets. “Traditionally clients have been 

beholden to a lack of execution flexibility 

ultimately leading to higher costs of 

execution. Our solution changes this 

giving users complete discretion over 

the order staging and routing process, 

leveraging any protocol to achieve best 

execution across ESP, RFQ and Algo.” 

Reactive Markets allows LPs to distribute 

prices to large numbers of clients, who 

can trade on a fully disclosed basis 

with their relationship LPs at no cost, 

connecting via a single API, front-end 

trader desktop and mobile app. Clients 

can trade FX Spot, Forwards, NDF, 

Swap and NDF Swap products across 

Streaming, RFQ & Algo protocols with 

25+ of the leading tier 1 bank, nonbank 

and regional specialist liquidity 

providers. 

Henry Durrant 



Edgewater Markets introduces RFQ product 

Edgewater Markets has announced the 

launch of its Request for Quote (RFQ) 

trade execution service. This exciting 

addition to Edgewater’s product lineup 

promises to transform the way the firms’ 

clients execute their trades, offering a new 

level of efficiency for executing large and 

unique order flow. The foreign exchange 

market is known for its liquidity, but also 

for its complexities, and Edgewater has 

been at the forefront of delivering cuttingedge 

solutions to meet the evolving needs 

of their clients. With the introduction of 

the RFQ, Edgewater continues its tradition 

of innovation, empowering traders with 

a powerful tool to enhance their forex 

trading experience and profitability. “At 

Edgewater Markets, we are dedicated 

to delivering solutions that empower 

our clients to trade how they see fit, 

accommodating their unique order and 

trade flow” said Brian Andreyko, Chief 

Product Officer of Edgewater Markets. 

“Our RFQ product represents a significant 

milestone in our mission to provide traders 

with the tools they need to succeed in the 

forex markets. We are excited about the 

possibilities this product offers and the 

Brian Andreyko 

positive impact it will have on our clients’ 

trading strategies.” 

NEWS 

New Change FX releases NCFX Forwards365 

New Change FX has announced the 

release of a new streaming swap data 

service. The service is called NCFX 

Forwards365 after its key feature of 

each broken date being individually 

calculated, rather than relying on 

interpolation of other points to arrive 

at a value. In addition to the NCFX 

Forwards365 service, New Change FX will 

shortly be releasing a live basis stream, 

Basis365. NCFX Forwards365 streams 

all business for the next 12 months of 

information and not just key dates. Paul 

Lambert, CEO of New Change FX said 

“We are extremely proud of the NCFX 

Forwards365 product. It has been a long 

and complex process to systematise the 

construction of accurate curves without 

using any interpolation, but the result 

is superb. Users can be sure that each 

point that they need to find a value for is 

individually calculated rather than being 

subject to what is inherently guesswork 

when using interpolation. This, coupled 

with the fact that users can stream 

365 days of data rather than having to 

calculate each point will deliver significant 

change to the electronification of the 

swaps market”. 

Paul Lambert 

NatWest joins FXSpotStream as liquidity provider 

FXSpotStream LLC has announced 

that NatWest has joined the Service 

as a liquidity providing bank. NatWest 

is now available and becomes 

the 16th bank available to clients 

connected to FXSpotStream’s price 

streaming service, joining Bank of 

America, Barclays, BNP Paribas, 

Citi Commerzbank, Credit Suisse, 

Goldman Sachs, HSBC, J.P.Morgan, 

Morgan Stanley, MUFG, Standard 

Chartered, State Street, Societe 

Generale and UBS. FXSpotStream 

Interim CEO, Tom San Pietro 

commented, “In Q1 of 2023 FSS rolled 

out new liquidity provider pricing 

plans that allow liquidity providers 

to choose a plan that best fits their 

business and commercial needs. Our 

objective was to improve our value 

proposition to our clients by delivering 

more of their relationship liquidity 

needs. We are delighted to announce 

Tom San Pietro 

that NatWest has taken advantage of 

the new pricing plans and is the 16th 

liquidity provider available to clients. 

On the back of a record-breaking 

volume year for FXSpotStream in 

2022, it is tremendously exciting to be 

expanding the liquidity offering for the 

first time since 2020.” Olivier Werenne, 

Head of eFX Sales EMEA and APAC at 

NatWest, said: “FXSpotStream’s global 

footprint and shared infrastructure 

allow us to deliver better pricing and 

liquidity to our clients, providing 

them with one point of access to 

liquidity without incurring the costs 

of maintaining multiple APIs. We are 

delighted to join FSS.” 


Evolving with the Market 

Added Functionality to Support Algos & Allocations Now Live 

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GUI 

Live 

RFS 

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London 

& Tokyo 

Offices Open 

FX|Insights 

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Launched 

USD11T 

Supported 

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FX Spot 

Streaming 

Only 

FX Fwds, 

Swaps Added 

Streaming 

Precious 

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NDF/NDS, 

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Total Reaches 

15 LPs 

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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. 


CobaltFX launches alternative 

Trade Notification Network 

NEWS STORY 

A Single Point of Failure (“SPoF”) in 

FX post-trade messaging, created 

by decades of market consolidation, 

poses a significant threat to the 

entire global financial ecosystem 

says industry veteran Andy Coyne of 

CobaltFX, voicing his concerns as the 

British fintech launches its alternative 

post-trade messaging service in 

efforts to de-risk FX and deal with 

lack of competition in the world’s 

effectively largest market. 

For far too long, the financial industry 

has grappled with lack of competition 

for FX post-trade messaging 

stemming from decades of industry 

consolidation; an issue having grown 

into a problem that today represents 

one of the most significant threats to 

the global financial ecosystem. In a 

nutshell, this is the brief assessment 

of Andy Coyne; a seasoned industry 

expert and founder of CobaltFX, today 

part of United Fintech, whose past 

tenures include executive positions 

with major global banks and FX 

fintechs alike. 

For the uninitiated, post-trade 

messaging is the digital exchange 

of real-time and critical trade 

confirmations between financial 

counterparts enabling the multi 

trillion-dollar a day FX industry. 

And according to Andy Coyne, 

there exists a number of core 

improvements that have long been 

overdue -notably that execution 

messages need alternative solutions 

that can run free of charge- that 

CobaltFX has set out to fix with 

a new Trade Notification Network 

(“TNN”) launching today in response 

to growing concerns amongst 

financial institutions about Single 

Points of Failure (“SPoF”) across the 

industry, reports Coyne: 

“Recent incidents, such as 

consolidation and a hack that 

disrupted market operations earlier 

this year, have raised concerns 

among major global banks about 

the inherent risks associated with 

SPoFs in FX operations and this has 

been a major call to action for us in 

launching the TNN. Further to that, 

we strongly believe that post-trade 

messaging is not a service that 

should be charged for. In the 21st 

cyber security scenario are far 

more severe than what is currently 

being reported publicly by financial 

institutions and industry observers 

alike, as many of the world’s largest 

banks are currently overexposed, 

leaving them vulnerable without an 

alternative or backup plan. 

To address the issue in the FX 

industry, CobaltFX’s launch of the 

TNN will provide banks with a 

genuine choice in post-trade FX 

messaging and backup plan in the 

event of cyberattacks or other forms 

of failure in the FX market - and 

essentially enable the industry to 

break free of the “Hobson’s choice” 

it has been caught-up in for decades, 

argues Coyne:“The FX market, by 

sheer trading volume, is amongst the 

world’s largest markets, making the 

need for comprehensive solutions 

even more pressing. 

Imagine if banks’ only messaging 

network all of a sudden came to a 

halt amid FX trading; this could stop 

trading completely. The introduction 

of the TNN is poised to eliminate the 

“Hobson’s choice” that has defined 

the FX industry’s service offering until 

now. 

century, messaging should be free 

and only value added services that 

It represents a significant step 

use that data should be chargeable”, 

forward in bolstering the industry’s 

says Andy Coyne. 

resilience against systemic risks - and 

Andy Coyne 

BREAKING WITH THE 

INDUSTRY’S “HOBSON’S 

CHOICE” 

Andy Coyne warns that the potential 

consequences of e.g. a catastrophic 

by effect the safeguarding of the 

entire financial ecosystem”, says 

Andy Coyne, noting that the threat 

of SPoFs should be a wake-up call 

for the financial sector to assess 

industry-wide - and not just in FX. 


Accelerate time-to-trade 

with LPs & clients. 

Future-proof your business 

CobaltFX Trade Notification Network revolutionises the market 

by rapidly connecting you to LPs and clients, through a cost-free 

flexible post-trade FX messaging network. 

Read more at unitedfintech.com/cobaltfx 


Photos by Richard Hadley. 

RECENT EVENT 

Takeaways from 

TradeTech FX in Paris 

September 2023 

By Saeed Amen 

Saeed Amen 

I’ve been in markets for close to twenty 

years. What has been my persistent 

takeaway, aside from the fact that 

there’s always more to learn about 

markets, is that whilst markets do 

change, themes do reoccur. It’s been 

nearly a decade since I first spoke at a 

TradeTech FX event. I thought it would 

be an interesting exercise to look at 

the topics which were covered back at 

my TradeTech FX event. So searching 

through my e-mails, I managed to find 

the agenda back from that first event. 

In terms of market themes, there were 

topics around best execution, TCA and 

then impending MiFID II regulations, 

CTAs impact on the market, whether 

there would inflation or deflation, and 

so on. 

KEY THEMES 

If we roll forward a decade to the 

latest TradeTech FX conference in 

Paris, some themes have certainly 

persisted! Notably, there was still a 

lot of discussion on how to do best 

execution and how to measure this 

with TCA. Of course, these days, we 

have much more data and tools in 

order to do TCA, and we have firms 

like TradeFeedr, where you can do 

peer group analysis to do your own 

TCA. Many of the discussions around 

benchmarking also moved purely 

from looking at FX spot, to other 

FX markets such FX swaps, where 

there is less transparency. Discussions 

around market drivers this time around 

(perhaps unsurprisingly!) revolved 

around inflation and central banks. 

Over the coming paragraphs, I’ll try to 


RECENT EVENT 

give a few more takeaways from the 

discussions around the event. 

The conference was opened with a 

panel on tackling inflation, shifting 

central bank policies and FX, with 

panellists, Altaf Kassam (State 

Street), Brian Mangwiro (Baring Asset 

Management) and Laura Cooper 

(BlackRock), alongside Peter Kinsella 

(UBP) as moderator. Kassam made 

the point that during QE, things were 

broadly simpler, with buy the dip and 

selling vol, as broad themes. Volatility 

was now back. Cooper, noted how we 

are seeing a new macro regime. The 

pandemic has sparked a significant 

shock. We were now in a higher 

inflation regime, and with other 

factors like net zero and demographic 

changes, yields were going to be 

higher for longer. Mangwiro suggested 

we are close to peak Fed rates, and 

leading indicators turning lower. There 

was broad consensus amongst the 

panellists of curve steepening. 

MACROECONOMIC FORECASTS 

A panel more focused on 

macroeconomic forecasts, was also 

moderated by Peter Kinsella (UBP), 

with panellists, Christophe Morel 

(Groupama), Florian Ielpo (Lombard 

Odier) and Mabrouk Chetouane 

(Natixis). Chetouane recapped how 

we got here in inflation, notably a 

supply shock and demand shock. 

Now there was a negative input from 

energy price drops, but core inflation 

was still sticky especially in Eurozone. 

There was a new era of scarcity in 

energy and labour markets. Morel also 

reiterated this point about scarcity, 

from commodities, human capital 

and also financial capital, noting we 

are in a new inflation regime. Ielpo 

discussed how in the US, you had 

fiscal policy effectively pulling up 

growth, whilst monetary policy was 

attempting to slow it down, and how 

inflation pressure was still building. 

On a broad basis, there was some 

consensus about inflation being an 

issue. That is somewhat at odds with 

our inflation forecasting models, at 

Turnleaf Analytics, which suggests that 

inflation is likely to be lower over the 

coming year in most markets. 

As befits an FX conference, there 

always needs to be panel on the 

dollar outlook! This was moderated 

by Isabel Albarran (Close Brothers), 

with panellists Stephen Jen (Eurizon), 

Caroline Houdril (Schroders), Stefan 

Hofrichter (Allianz), Kiran Kowshik 

(Lombard Odier), Samuel Zief (JPM 

Private Bank) and Gonzalo Canet 

(ATFX). A debate in markets is how 

how a soft landing would impact the 

USD. Houdril noted that whilst a soft 

landing would be likely negative for 

the dollar, if the US was doing better 

than elsewhere, it could support the 

USD. Albarran felt that the USD would 

be broader be stronger. In periods 

where there had been broader based 

depreciation, there had generally 

been several factors at play, the USD 

had been a lower yielder, there had 

been EM interventions and an impact 

from terms of trade moves. Currently, 

obviously, the USD is a higher yielder. 

For Jen, he noted that there have been 

two drivers for the USD, notably the 

Fed and inflation, a now a focus on 

China, which was new. Before, China 

had been a high beta play. Whilst 

there were structural negatives on the 

dollar, the twin deficits, we don’t tend 

to play attention to them till there was 

a cyclical turn. He suggested the USD 

was 10% overvalued. 

Kowshik discussed the topic from 

the perspective of his clients, who 

were generally EUR and CHF based. If 

equities fall, EUR tended to weaken. 


Takeaways from TradeTech FX in Paris September 2023 

and moderator Roderick Ngotho 

(Independent) was focused on East 

Asia. Jen, noted how Mexican exports 

to USA had passed those from China 

as a result of reshoring. There was 

still substantial financial exposure to 

China, Mederios said, from the vast 

majority of stocks that Americans 

own. Indeed, we only need to look 

at the recent price action in Apple as 

anecdotal evidence, of how China can 

impact US companies. 

RECENT EVENT 

ACTIVE CURRENCY STRATEGIES 

I was also on a panel on active 

currency strategies panel, alongside 

Andreas Koenig (Amundi Asset 

Management), Frederick Fischer 

(Allianz Global Investors), Achim Walde 

(Metzler Currency Management) and 

Roderick Ngotho (Independent). It 

also included some thoughts on the 

dollar, where most of the panellists 

were bullish, I was the odd one out, 

suggesting some downside, citing 

that on a relative basis that our 

inflation forecasts suggested more 

downside in the US versus the other 

major economies, which would likely 

be bearish USD. We also discussed 

how currency strategies fitting in 

broadly, in terms of investing. Walde 

made the point that FX risk was a big 

component of your returns, citing an 

example with US stocks over the past 

few years, where returns for a local 

investor would have been 300% versus 

400% for a Eurozone denominated 

investor. Whereas FX is often seen 

as an afterthought, managing it can 

make a big difference! 

For CHF the situation was trickier, it 

was low yielding, and has steadily 

appreciated, and has had its currency 

account surplus recycled. There was 

also the factor that FX was a monetary 

policy tool in Switzerland. The topic of 

the dollar as a reserve currency also 

came up, although the consensus was 

that it was difficult to replace. One 

important point was that the liquidity 

in financial sector is what counts for 

a reserve currency, given that the 

proportion of financial transactions is 

50x the real trade. 

A later panel also with Stephen Jen 

(Eurizon), alongside Bridgette Le Bris 

(Ostium), Gustavo Mederios (Ashmore) 

LIQUIDITY & MARKET 

STRUCTURE 

As mentioned earlier the topic of 

execution was also a key part of 

discussions at the event. There was 

an enlightening panel on liquidity 

and market structure, featuring 

Tgetg Roethlin (UBS), Jay Moore 

(FX HedgePool), Jeremy Smart (XTX 

Markets), Simon Osterberg (SEB), 


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Takeaways from TradeTech FX in Paris September 2023 

RECENT EVENT 

Alexander Nowak (JPM) and Gordon 

Noonan. It was under Chatham 

House rules, so I’ll just give a broad 

generalisation of the discussion. One 

topic that came up several times was 

that of TCA, and how in spot it is 

more developed, with solutions like 

TradeFeedr. However, it was noted that 

in other areas like swaps TCA isn’t as 

well developed. In swaps of course 

it is is more difficult because of the 

need to understand dynamics around 

things like broken dates, which a simple 

interpolation may not necessarily 

capture if you are trying to create a 

benchmark. If you do TCA, there needs 

to be some sort of benchmark to judge 

against your own executions. There 

was talk of using a CLOB for swaps, 

although there might be differing 

incentives for this amongst market 

players. This would help solve the data 

problem associated with swaps. 

DIGITAL ASSETS 

One thing that I remember on my 

first TradeTech FX, was that there was 

a discussion about digital assets. At 

the time it seemed very exotic! Whilst 

digital assets are not still mainstream, 

the market is definitely maturing, 

and there was a digital assets panel 

moderated by Eva Szalay, with 

panellists Yves Choueifaty (TOBAM), 

Vinay Trivedi (Maxx Trader), Cassandra 

Cox (LMAX) and Zahreddine Touag 

(Woorton). One major discussion point 

was whether the ETF on bitcoin spot 

would be approved. The consensus 

was it would be and Choueifaty noted 

how having the ETF would make it as 

easy to buy bitcoin as any other asset 

available as ETFs. Touag also noted 

that many larger players were getting 

interested in digital assets. 

Where will FX markets be in another 

decade at TradeTech FX? I’m sure it’ll 

be an exciting 10 years, but I suspect 

a lot of the same topics will reoccur, 

but (to paraphrase Eric Morcambe) not 

necessarily in the same order! 



Next generation FX analytics: 

Bringing transparency and more to the 

FX execution process 


Image by Shutterstock 



market risk back to the client. It is 

therefore crucial that analysis supports 

an auditable decision-making process 

to manage that risk.” 

Vivek Shankar 

Electronification has steadily increased 

in FX over the years, and has spawned 

new stakeholder needs. Proving 

commercial viability and increasing 

efficiency are two examples that have 

led to data analysis becoming a critical 

portion of the FX execution workflow. 

With more data at firms’ disposal 

than ever before TCA is playing an 

important role in helping them finetune 

their strategies. Guy Hopkins, 

CEO and Founder of FairXchange, 

believes this need underlies recent 

developments in execution analytics. 

“Regulatory drivers such as MiFID II 

have certainly increased adoption of 

data analysis,” he says, “however there 

is a much deeper commercial need to 

understand the impact of technology 

on the execution process.” 

Whilst Paul Lambert, Chief Executive 

Officer, New Change FX, adds that 

the shift towards algo execution has 

also had an effect. “The pandemic 

was key in driving adoption as traders 

were unable to use ‘old’ approaches 

to execution,” he says. “The realisation 

that passing an algo order is effectively 

the same as passing an ‘at best’ order 

to a bank has simultaneously driven 

the realisation that analysis is vital 

to ensure best execution. The risk for 

buyside traders that they might be 

making poor execution choices now 

poses a direct threat to the trader’s 

job. The effect of algos is to transfer 

PREPPING FOR DATA ANALYSIS 

Given the twin needs of justifying 

trade decisions and demonstrating 

their value to firms, data quality is 

playing a key role. Lambert lists a 

few different datasets traders look 

at from a high level. “Traders need 

to understand all aspects of the 

behaviour of their LPs,” he says. “The 

historical approach of simply adding 

LPs via an EMS is no longer adequate 

because each LP and their effect on 

the pool needs to be understood.” 

“Similarly, algo execution details like 

LP prioritisation and selection, reject 

rates, market impact, etc, need to 

be understood at a granular level 

rather than on a generalised, posttrade 

basis,” he continues. “The 

most important aspect remains 

the recording of a decision-making 

process that justifies execution 

methodology using real-time data. 

Static TCA is of little use in that 

process.” 

Meanwhile, Oleg Shevelenko, FX 

Product Manager, Bloomberg, echoes 

Lambert’s point about algos breeding 

new data analysis needs. “Automation 

and algorithmic trading require 

participants to have a much deeper 

understanding of their execution 

performance and how it can be 

incorporated into execution strategies 

that realise the most benefit,” he 

says. “Unbiased data is fundamental 

to the objective evaluation of trading 

performance,” he continues. “Liquidity 

providers are turning to third-party 

independent data providers to help 

them demonstrate the quality of their 

execution algorithms to their clients, 

while clients are also looking for 

independent data to benchmark their 

execution decisions and showcase 

their value to investors.” 


Next generation FX analytics: Bringing transparency and more to the FX execution process 


“It is important to differentiate between independent 

analysis and independent data” 

Guy Hopkins 

James Knoop, FX Back Office Solution 

Specialist at ION, believes independent 

data is critical for banks. “Banks 

having their own independent data 

is critical so that they have leverage 

when interacting with their LPs,” he 

says. “Being able to highlight areas 

where LPs are struggling against 

their peers or being deliberately toxic 

with their flow can lead to a closer 

collaboration between Bank and LP. 

This in turn improves their execution 

and profitability.” He cites a situation 

as an example. “Toxic flow from clients 

or toxic actions for LPs such as long 

last look times or quote spamming 

can impact the bank’s trade execution 

outcomes. Having access to data to 

identify these scenarios enables bank’s 

to make informed decisions about how 

to price clients and interact with their 

LPs.” 

Lambert stresses the importance of the 

unbiased standard or ruler to ensure 

the data firms receive is independent 

and lacks biases. “If the ruler isn’t 

independent, then you cannot trust 

your results to be objective,” he says. 

“For example, if you are using data 

from inside your trading ecosystem 

when LPs are skewing their prices, as 

they often will to reflect their trading 

view, your ruler is changing, and 

you will embed bias. For unbiased 

measurement, you need to use an 

exchange rate that your activity isn’t 

affecting.” 

Phil Morris, CEO of Reactive Markets, 

is extremely familiar with these biases 

and the importance of ensuring high 

quality independent data. When asked 

about the effects of independent data 

on the kind of analysis liquidity takers 

can perform, he lists a scenario. “A 

liquidity taker may have access to vast 

amounts of market data from their LPs 

on a specific platform,” he says. “This 

allows them to analyse the relative 

pricing and execution quality between 

these participants. It does not answer 

questions about how their LP pricing 

may differ on other trading platforms, 

or how a new LP may be able to 

change the shape of their liquidity 

pool. Adding independent data can 

open up insights into how their LPs 

or platform providers are performing 

relative to the wider market.” 

“Similarly,” he continues, “an LP will 

only see its trades with a specific 

liquidity taker and will have no context 

about its relative performance or 

what improvements it needs to make 

to win more business. By accessing 

independent anonymised datasets, 

an LP can proactively optimise their 

pricing on a client-by-client basis 

resulting in better outcomes for both 

the client and the LP. At Reactive 

Markets, we offer complementary 

liquidity management and data 

services tools as a core part of our 

offering,” he says. “On client request, 

we capture and deliver their dataset 

to several specialist data and analytics 

companies where they can analyse this 

alongside their larger, independent 

datasets.” 

FX execution workflow resembles a conveyor belt where orders are moving through various stages 

Lambert explains how New Change FX 

assists its clients. “The NCFX mid-feed 

is designed to be the unbiased ruler 

because it is not part of a trading 

platform,” he says. “The possibilities 

for measurement expand enormously 

once you can triangulate your own 

available spread and midrate, your 

micro price, your available volume, and 

prevailing market conditions (volatility, 

update frequency, etc.) To measure 

your outcomes, you need the data 

from inside your system and measure 

them against the independent 


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“The historical approach of simply adding LPs via an EMS is 

no longer adequate because each LP and their effect on the 

pool needs to be understood.” 

benchmark from outside the system. It 

is from this information that the trader 

can create an execution methodology 

for each trade.” 

FairXchange’s Hopkins acknowledges 

the importance of independent data 

sources but stresses that analysis is 

just as critical. “It is important to 

differentiate between independent 

analysis and independent data,” he 

says. “Independent data analytics firms 

like FairXchange provide objective, 

neutral analysis of trading firms’ data. 

This gives firms valuable insights into 

their trading business that they might 

otherwise miss, and it also removes 

the perception of “marking your 

homework”. Indeed certain types of 

analysis only make sense when based 

on a particular firm’s data – their 

unique liquidity, for example,” he 

states. 

Paul Lambert 

When does incorporating a benchmark 

or ruler (as Lambert explained) 

hold water? “There are times when 

it is helpful to combine this with 

independent data sources,” Hopkins 

responds. “Particularly when the 

analysis is intended for third parties, 

such as clients, counterparties, or 

regulators. This gives a useful degree 

of standardisation, and can remove 

the potential for a given firm’s trading 

activity to leave a signature on the 

reference data against which trades are 

measured. It is also helpful for creating 

a level playing field, using objective 

data that counterparties can agree 

on.” 

COMBINING DATA WITH 

ANALYTICS TOOLS FOR MORE 

TRANSPARENCY 

“Data alone is quite useless without 

analytics,” Bloomberg’s Shevelenko 

says, “as analytics are a vehicle that 

make sense of your data and uncover 

meaningful conclusions. Therefore, data 

and analytics go hand in hand helping 

to constantly reshape the execution 

process, making it clearer and more 

transparent.” 

Hopkins believes data standardisation 

is a critical first step firms must invest 

time into. “Standardise the data into a 

format that permits firms to compare 

across different venues, trading 

platforms, and counterparties,” he 

says. “The analytics then need to be 

powerful enough to allow firms to 

quickly identify areas of interest, in real 

time if possible. This now extends to 

using AI to detect anomalies or issues 

that require attention.” 

He also points out that these analytics 

must be accessible to as broad a 

constituency of users as possible. 

“Data and data analysis are now part 

of everyone’s daily working life, it is no 

longer the province of a small number 

of highly qualified specialists,” he notes. 

Lambert counters that firms must 

look earlier in the cycle and focus 

on sourcing enough data. “Almost 

no buyside users can consume and 

analyse their available liquidity,” 

he says. “They are shooting in the 

dark without the data to understand 

their feeds and act accordingly. Most 

analysis available today is based on 

‘dead’ data, which offers little in terms 

of live execution problems.” 

He explains that using such data with 

algos doesn’t make sense. “The use of 

a historic database of algo executions 

to guess which algo to use now is like 

driving from A to B using last week’s 

traffic conditions when roadworks 

may have moved, and the weather 

may have changed. This challenge is 

what led New Change to build its 

Data Processing as a Service (DPaaS) 

offering. NCFX, under an ordinary 

platform agreement, can take feeds 

from banks and process them to 

produce live analytics for its clients. 

Clients can create their live midrate, 

see how a trade or algo execution 

with a bank affects the prices at every 

other institution, and triangulate their 

midrate with the independent midrate 

from NCFX and their own micro-price.” 

Lambert adds that while these feeds 

are built on live data, clients can store 

James Knoop 

“Being able to highlight areas where LPs are struggling 

against their peers or being deliberately toxic with their flow 

can lead to a closer collaboration between Bank and LP.” 


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“Data and analytics go hand in hand helping to constantly 

reshape the execution process, making it clearer and more 

transparent.” 

complete record of execution decisions 

requires that all available pricing is 

available, analysed, and understood. 

There are lessons in yesterday’s 

outcomes, but without live feedback 

and the contextualisation of current 

and dynamically changing conditions, 

we are trying to optimise with only 

half of the picture.” 

extremely valuable, given this link. 

FairXchange’s Hopkins notes that 

while the shift in data is promising, 

the implications for real-time decisionmaking 

driven by human traders are 

uncertain. “With the rapid progress 

of AI,” he says, “humans might step 

back from the decision process at the 

actual point of execution, and instead 

transition to becoming real-time risk 

managers, with oversight over a suite 

of automated execution tools that are 

responding seamlessly to changes in 

the market.” 


Oleg Shevelenko 

their data feeds with New Change FX 

and run historical analyses on them. 

TCA, LPA, AND MOVING DATA 

FROM POST TO PRE-TRADE 

Lambert’s comments highlight 

the effort solutions providers are 

undertaking to move data from a 

post-trade environment to a pretrade 

one. As Lambert puts it, “It is 

no longer adequate to base trading 

choices purely on historical data. Nor 

is it acceptable to take an LP’s word 

for what their products can do. A 

Shevelenko notes that this move is 

critical, and the breadth of post-trade 

datasets impacts signal reliability. 

“The link between post-trade data 

and pre-trade analytics for decisionmaking 

is very important,” he says. 

“Trading parameters such as the 

choice of liquidity providers for a 

given instrument, optimal number of 

liquidity providers in RFQ, or the choice 

of the algorithmic trading strategy 

are now available. More extensive 

analysis of post-trade data can also 

reveal the impact of updating algo 

parameters while the order is in flight 

versus leaving the default ones for the 

duration of an algo.” He adds that 

platforms offering peer analytics are 

“The big market makers have been 

doing this for many years,” he adds, 

“so it would not be a surprise to see 

this more widely adopted on the buyside. 

This has important ramifications 

for how analytics develop.” 

Analytics are central to TCA, but the 

industry has witnessed a lot of talk 

about a move to LPA or Liquidity 

Provision Analytics recently. How valid 

is this chatter, and is TCA analysis 

evolving faster than expected? John 

McGrath, Chief Revenue Officer 

of BidFX, thinks otherwise. “BidFX 

termed the phrase ‘LPA’ when we 

started to develop our Liquidity 

Provision Analytics feature to give 

THERE IS STILL PLENTY OF 

ANALYSIS TO BE DONE IN 

THE TCA SPACE 




“TCA in combination with LPA gives a much more holistic 

view on the trade performance of counterparties.” 

volatility. Stakeholders have long been 

interested in leveraging execution data 

to dig deeper into them. 

there is no guarantee that another 

McGrath believes the pieces are in 

LP would have filled them, especially 

place for firms to break down this 

in a volatile environment,” he says. 

opacity. “Cost chains are complex, 

“However, reject ratios, response 

but with advanced data collation and 

time and spread analysis can be easily 

a deep understanding of customer 

measured. It has traditionally been the 

workflow, we can now start to address 

role of the Liquidity Manager to look 

these underlying components across 

at these numbers in a holistic way and 

the whole trade process,” he says. 

make some sense of them.” 

He explains that BidFX developed a 

“Best Value” suite to allow the buyside 

“A low fill ratio doesn’t immediately 

to factor in costs in real-time. “This has 


John McGrath 

clients the ability to start evaluating 

their counterpart selection based on 

the wealth of data we could provide 

whether that be average LP spreads, 

skews, TOB, and market impact,” 

he says. “I wouldn’t say people are 

moving away from TCA. More that 

in combination with LPA, it gives a 

much more holistic view on the trade 

performance of counterparties. Clients 

now want to be able to affect their LP 

selection in flight based on a feedback 

loop on their LPA.” 

Lambert agrees with McGrath’s views. 

“At present, there is still plenty of 

analysis to be done in the TCA space,” 

he says. “The key to getting the best 

outcome is to use all the relevant 

information, and we believe that 

does indeed mean using live analytics 

around LPA, but it is still important to 

understand how trading choices have 

performed historically and how the 

method of execution was affected by 

the conditions in the market.” 

Meanwhile, Paul Liew, Head of 

Liquidity Management at TradAir, an 

ION company, notes that quantitative 

metrics are giving traders a great 

view on the execution impact of 

their decisions. “It’s difficult to put a 

monetary cost on rejected orders as 

mean that an LP is problematic, 

when the orders arrive only at the 

last minute just before the quote 

is refreshed. TCA will still be an 

important tool as PnL impact is more 

easily calculated.” 

Shevelenko thinks the utility of LPA 

analytics is high enough for firms to 

demand them as default parameters 

in execution platforms, something 

Bloomberg is acting on. “Recently, 

Bloomberg released a new suite of 

FX pricing quality tools that allow 

price takers to investigate how often 

a counterparty priced and won 

the trade, were runner up with the 

“Best Alternative” price or placed 

somewhere in the pack,” he says. 

“Price takers can also measure how 

often a counterparty declined to 

price, failed to pick up the request, or 

rejected a request to deal. Using the 

same analytical toolkit, price makers 

can quickly identify when clients 

traded away, or where opportunities 

to price are being missed and 

why, such as issues with internal 

counterparty setup, enablement 

issues, or internal credit rejects.” 

REMOVING OPACITY IN 

EXECUTION COST CHAINS 

FX execution cost chains have plenty 

of hidden costs within them, especially 

when evaluating the impact of 

counterparty liquidity and market 

now been developed to allow clients 

to start planning how they factor in 

counterparty selection to the trade 

process via a feedback loop.” 

Shevelenko echoes these views. 

“FX execution workflow resembles 

a conveyor belt where orders are 

moving through various stages such 

as creation, validation, compliance 

checks, eligible counterparty 

assignments, netting, and 

optimization,” he says. “Aggregated 

analysis over a representative 

timeframe could suggest various 

actionable enhancements to the 

workflow and trading process.” 

Hopkins offers a few examples of 

the questions execution analytics can 

answer now. “What is the economic 

impact of a valued counterparty 

terminating a relationship?,” he says. 

“How much does it cost to establish 

a relationship that is capable of filling 

the gap? Which liquidity providers 

should a firm be trading with? These 

are questions that firms have been 

wrestling with since trading began, but 

only now are technologies emerging 

that can start to help firms answer 

them on a systematic basis.” 

New Change FX’s Lambert cautions 

that examining the context behind 

the data is critical. “By providing the 

ability to capture, analyse and store 





“By accessing independent anonymised datasets, an LP can 

proactively optimise their pricing on a client-by-client basis 

resulting in better outcomes for both the client and the LP.” 

Phil Morris 

the live price data direct from the 

source, without knowing what the 

EMS does, there is only a limited set of 

conclusions that a trader can reach,” 

he says. “Only the most obvious and 

egregious costs can be spotted, and 

the refinement that exists in the detail 

is lost. We do not see others putting 

in place the necessary foundations to 

make unbiased, informed, and timely 

trading decisions.” 

A ROLE FOR AI AND ML 

Can AI and ML play a role in bringing 

context and simplifying analysis here? 

Lambert says yes, but with a few 

caveats. “Their success will rest on the 

quality of the data that is available to 

them,” he says. “We know that with 

a model it is always a case of garbage 

in garbage out, and that is true with AI 

and ML too.” 

Hopkins agrees and adds more 

nuance. “It is important to recognise 

that AI is not a silver bullet,” he says. 

“The point of execution analysis is 

to provide insight and transparency. 

Deploying black-box algorithms 

to the analysis process that no 

one understands introduces an 

“explainability” problem. This moves 

the opacity from the trading process 

to the analysis process, which doesn’t 

solve anything.” 

However, he concedes that AI and 

ML have highly exciting use cases. 

“It is an area that FairXchange has 

invested in significantly,” he says. 

“Guided by appropriate experience 

and domain expertise, and based on 

THE ROLE OF THE LIQUIDITY 

MANAGER CAN BE AUTOMATED 

TO A CERTAIN EXTENT BY AI 



robust, standardised data and highperformance 

infrastructure, there 

is a huge opportunity in this area.” 

He cites an example. “One area that 

is getting a lot of focus currently is 

AI-driven alerting, informing users 

about things happening in their 

trading business that they might 

not otherwise be aware of. With 

the huge amount of data available 

individuals cannot check all potential 

factors that might impact their 

business. AI will play an essential role 

in pointing them to the issues that 

need attention.” 

BidFX’s McGrath talks about a few 

initiatives. “We already have a team 

working on this developing product at 

BidFX and although the industry is still 

in the early phase of rolling out these 

features there could be some real 

efficiency and quantifiable benefits for 

the sellside and buyside in how MIS, 

data, and analytics are accessed and 

actioned upon,” he says. 

ION’s Liew adds, “The role of the 

Liquidity Manager can be automated 

to a certain extent by AI, such as 

finding optimum combinations of 

Market Takers, Liquidity Providers, and 

Currency Pairs quickly. This can be a 

tedious manual process.” 

COLLABORATION AND THE 

EVOLUTION OF FX ANALYTICS 

While solutions providers are offering 

innovative solutions, they’re hampered 

by the sheer number of touchpoints 

in the execution workflow. Reactive 

Markets’ Morris lays out the issue. 

“Market participants often have 

many market-facing execution touch 

points within a given workflow,” he 

says, “whether an execution protocol 

(ESP, RFQ or Algo,) or platform being 

used. Consolidating that into a single, 

normalised view of the world can be 

complex, with specific benchmarks 

and analytical requirements by each 

individual counterparty.” 

“It’s difficult to put a monetary cost on rejected orders as 

there is no guarantee that another LP would have filled 

them, especially in a volatile environment,” 

Collaboration and integration 

between platforms is the best way to 

solve this roadblock, Morris says. “By 

collaborating and having connectivity 

to the leading analytics and TCA 

providers in the market, clients have 

the flexibility and opportunity to 

automate much of their data and 

algo analytics while we complement 

the workflow by providing leading 

execution performance and 

connectivity to liquidity providers. This 

superset of independent data from 

a variety of sources allows clients to 

make informed, data-driven decisions, 

something which we encourage and 

actively facilitate in providing our 

clients access to.” 

Hopkins adds to this view. “Without 

collaboration through data, firms are 

solely restricted to their own view of 

the world,” he says. “FairXchange 

was conceived purely to facilitate 

collaborative dialogue between 

trading counterparties. It is even the 

inspiration of our name – the fair 

exchange of data between trading 

firms to arrive at the optimal mutual 

outcome.” 

Lambert thinks our daily conditioning 

to data readily available on 

smartphones makes it obvious 

that FX analytics providers will 

face similar demands. “The most 

popular ecosystem will be the one 

that provides its users with the best 

experience by offering the most choice 

and highest quality of applications to 

manage the FX workflow from end-toend,” 

he says. “That means bringing 

together all required components. 

Each part of the workflow demands 

different attributes, whether its 

technology, liquidity provision, 

independence, or analytical power, 

and we believe that no single provider 

can be all things to all.” 

Moving forward, Shevelenko thinks 

integration and collaboration’s benefits 

are too obvious to ignore. “As resource 

constraints and cost pressures continue 

to present challenges for the industry, 

the platforms offering front-to-back 

execution and analytics services are 

likely to continue to gain traction with 

clients,” he says. He believes these 

conditions will create a virtuous circle 

where platforms and LPs come to 

rely on each other, pointing to how 

the execution analytics space will 

evolve. “Advances in technology are 

going to continue to drive innovation 

including data and analytics,” he 

says. “Platforms are going to further 

rely on liquidity providers to share 

aggregate data sets to power analytics. 

Liquidity providers are likely to leverage 

platforms for independent and 

objective evaluation of their liquidity 

and algorithms.” 

Ultimately, every trader aims to 

reduce market impact from their 

trading. Execution analytics are quickly 

evolving, and with more AI use cases 

emerging, traders do not have to fly 

blind. 

Paul Liew 


Electronification rising 

amid turbulence: Taking 

a closer look at the 

MENA FX picture 

By Vivek Shankar 

REGIONAL E-FX PERSPECTIVE 




The MENA region has never grabbed 

FX headlines quite as violently as it did 

this past month. News of the Israel- 

Hamas conflict increased volatility in 

the stock and commodity markets, with 

the side effects impacting FX flows. 

However, the current crisis has not 

changed the prevailing e-FX story in 

MENA. The electronification of FX, 

fintech sophistication, and the Gulf 

region’s decoupling from oil wealth 

are all steadily rising. Add to this the 

resilience of Israel’s nascent fintech 

sector and growing diversity in financial 

products on offer and the MENA’s 

overall economic and technology 

outlook seems well placed despite 

current events. 

Hussain Almohri, Head of Trading, 

MENAT, at HSBC, points to strong GDP 

growth as a factor for increasing FX 

demand. “During the past couple of 

years, what with strong GDP growth in 

the region,” he says, “there has been 

a material shift in FX requirements, 

particularly after the pandemic.” 

“Saudi Arabia alone is projected to 

see its GDP reach US$1.7tn by 2030. 

It stood at over US$1trn for 2022, up 

from US$868bn the year before. In 

addition, many asset managers and 

hedge funds have moved their physical 

locations to MENA, to capitalise on 

the economic growth of the region, 

the region’s vision to invest in its 

infrastructure, as well as its ambitious 

growth plans.” 

DELIVERING TRANSPARENCY 

Recent local economic reports show that 

cross-border FX needs have remained 

high, given the number of expat 

workers in the region’s biggest markets. 

While recent drives to hire citizens in 

Gulf countries have slowed FX volumes a 

bit, the region continues to account for 

a significant amount of outflows. 

For instance, the Gulf region accounts 

for the highest amount of FX outflows 


Electronification rising amid turbulence: Taking a closer look at the MENA FX picture 


“During the past couple of years, what with strong GDP 

growth in the region, there has been a material shift in FX 

requirements, particularly after the pandemic.” 

Hussain Almohri 

to South Asian countries despite 

slowing economic growth (The Gulf 

region grew by 7.4% in 2022, a 

number expected to drop to 2.5% per 

the World Bank.) 

“We have seen SAR, AED, and KWD 

as the currencies most in demand,” 

Almohri says, “with AED having the 

most notable growth in terms of 

volumes over the past 18 months.” 

News is not as positive with the Israeli 

Shekel, which has lost strength due 

to internal government crises in that 

country and the recent war. 

Despite Israel’s central bank pouring 

$30 billion into supporting its currency, 

the Shekel shed 3% in its biggest fall 

since February 2023, when the judicial 

crisis was at its peak. Observers can 

divide the MENA picture between 

the GCC and the rest, with the rest 

experiencing considerable strain. 

Lebanon continues to reel under the 

weight of consecutive economic crises, 

and Egypt’s dependence on external 

tourism for hard currency receipts 

has not reduced. Given its proximity 

to the Gaza war zone and recent 

errant excursions by Israel’s military, 

Egypt faces significant challenges in 

managing its currency exchange rate. 

On the positive side, Chinese 

investments in the region have 

increased, creating more diverse 

sources of FX flows, and pushing 

traders to call for more transparency 

and efficient risk management. Small 

vanilla FX flows are largely automated, 

with more market participants 

demanding TCA as standard. 

Albert Blackburn, EMEA EM Business 

Development Manager, FX, at LSEG, 

explains, “The buy side is eager to 

understand trade costs and what their 

impact is on the market and how their 

liquidity will be used. Pre-trade and 

post-trade analytics continue to see an 

increase in their usage and offer better 

transparency to the market.” 

And what about STP and TMS 

demands? 

“STP and Treasury Management 

Systems continue to be rolled out at 

pace across the regions as firms seek 

to maximise their positions,” he says. 

This rise in electronification has shrunk 

spreads, with more banks offering 

greater context behind their pricing, like 

market news and historical trends. 

Other transparency-enhancing efforts 

include IM communication channels 

and data-backed insights into RFQ 

workflows. Blackburn lists a few 

ways in which LSEG is meeting these 

demands. “LSEG FX has a history 

of delivering market infrastructure 

and workflow tools into frontier and 

emerging markets,” he says. 

“Matching and FXall offer robust bestin-class 

solutions that can be leveraged 

by regional banks and clients with 

little friction. Our white-label workflow 

products provide turn-key solutions 

that reduce time-to-market for smaller 

banks looking to quickly expand their 

digital footprint.” 

Regulation and continued government investment in infrastructure are slowly turning the GCC into a hub for 

sophisticated investors 

Blackburn notes that local banks have 

released new features to their platform 

in response to corporate demand. And 

what are some of these? “Competitive 

quotes are always key, and the ability to 

trade at the best price is key,” he says. 

“However resting orders, options, and 

fixing orders are also in demand. Some 

of the banks have started to use algo 

for trading and this continues to be a 

new growth area for the banks that 

serve the region.” 


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“Like elsewhere, the buyside across the MENA region is 

eager to understand trade costs and what their impact is on 

the market and how their liquidity will be used.” 

Albert Blackburn 

HSBC’s Almohri agrees. “Local banks 

are adapting to electronification at 

pace,” he says. “It’s a strong trend 

that we do not see slowing down 

anytime soon. This has involved material 

changes in workflow, processes, and 

technological buildout, which, as one 

might expect, can carry operational 

risks in their execution and, therefore, 

might require adjustment in planning 

timelines.” 

Blackburn notes that LSEG doesn’t view 

the region as an emerging market, as is 

the prevalent global view. Several GCC 

countries only recently moved from 

the MSCI Frontier Markets index to the 

Emerging Markets one. While this move 

has accelerated FDI inflows, volumes 

remain small compared to global 

benchmarks. 

He explains further. “Many of the 

regional firms have been engaged 

in electronic trading in the global 

FX market for many years,” he says. 

“Whilst there are opportunities to 

support governments and central banks 

evolve market structure as countries 

look to reform access to their domestic 

currencies, we see no difference in the 

levels of client sophistication in this 

region to any other.” 

DEMAND FROM SOPHISTICATED 

INVESTORS 

Regulation and continued government 

investment in infrastructure are slowly 

turning the GCC into a hub for 

sophisticated investors. Almohri lists a 

few reasons for several hedge funds 

and asset managers setting up shop 

here. 

“Exponential growth in the region’s 

debt capital markets, following the oil 

Many asset managers and hedge funds have moved their physical locations to MENA, to capitalise on the economic 

growth of the region 

price drops between 2014 to 2016, 

together with the transformation 

and economic diversification plans in 

MENA, has attracted a large number 

of hedge funds and asset managers 

into the region,” he says. “With that, 

we have observed a higher interest 

in methods of execution and data 

analytics, which are tailored for a more 

sophisticated segment of the market.” 

“We have observed more demand and 

FX flow driven by foreign investors,” 

he continues. “This has been in 

response to policy changes leading to 

a relaxation of restrictions on foreign 

ownership of assets and allowing more 

access to the market.” 

As electronification steadily rises, algo 

adoption is also increasing. “FX algo 

execution is still at an early stage of 

adoption in MENA,” cautions Almohri, 

“although it is becoming a growing 

topic of discussion with clients as 

an additional tool at their disposal, 

particularly among institutions that 

trade equities. Algorithmic stock 

executions are more mature and 

already embedded in their typical 

workflow.” 

And what does the electronic versus 

voice trading picture look like? Some 

MENA currencies are famously illiquid. 

Has electronification changed that 

picture? Blackburn and Almohri reckon 

it hasn’t. “Electronic markets are 

now the norm in more established 

and larger Middle East economies,” 

Blackburn says, “however in smaller 

markets, central banks are seeking to 

work with their local counterparties 

to facilitate orderly markets. In some 

regions e-trading is still relatively new, 

continued pressures on credit and 

banks are facilitating this approach.” 

“Voice trading is still the preferred 

channel for large transactions,” Almohri 

says, “where electronic liquidity 

doesn’t exist or is particularly thin. One 

significant factor for further increasing 

electronic liquidity distribution would 


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THE STATE OF 

RETAIL FX IN MENA 

Low volatility, the crypto winter, 

and high interest rate macro 

environments: Retail brokers 

have had plenty to contend with 

over the past year. When we last 

checked in with Mohammad 

Isbeer, Global Head of Brokerage 

Sales at Equiti Group, he noted 

observing high retail trading 

flows, particularly in the crypto 

and DeFi space. Is this still the 

case? “I’d say overall flows 

haven’t dropped off, but they 

certainly have switched from 

speculative assets like crypto to 

safe-haven ones like gold. Low 

volatility across all asset classes 

and macro uncertainty have 

pushed flows that way,” he states. 

Isbeer notes that gold has 

accounted for over half of all 

retail trading flows over the past 

three to four quarters. As retail 

interest in FX and CFD trading 

remains high, the MENA region 

has witnessed more retail brokers 

emerging, leading to a highly 

competitive sector. 

“A lot of this rise is driven by 

regulations opening up, like 

the SCA licence in the UAE and 

Jordan modifying regulations a 

couple of years ago,” Isbeer says. 

“Add to this existing centres like 

Bahrain, and you have fertile 

ground for retail presence.” 

He’s quick to point out that while 

regulations are weeding out 

undesirable brokers, even fully 

licensed ones face challenges 

when getting business up and 

running. For one, their choice 

of LP is crucial. “The market has 

seen some offers too good to be 

true, and unfortunately, some 

brokers have fallen victim to 

them.” 

“Checking whether an LP can 

offer you Tier 1 access to prices 

is the most critical thing,” Isbeer 

continues. “If your LP can’t give 

you that access, then what’s 

the point of the relationship? 

Regulation is important too. Every 

credible LP is regulated in a Tier 1 

jurisdiction.” 

Isbeer also recommends brokers 

check their LP’s balance sheet 

strength and risk management. 

“It boils down to security,” he 

says. “What are their risk limits, 

and how do they monitor them? 

Any risk lapses on the LP’s end 

will reflect poorly on the retail 

broker too, costing them their 

reputation.” 

A loss of reputation in a crowded 

market might spell the end of a 

broker’s business. Add to this mix 

increasing sophistication amongst 

investors, and risk management 

becomes paramount. Brokers 

seem to be taking this into 

account. 

“Many brokers are working 

towards reducing risk limits, 

incorporating tools like smart 

hedging to reduce their 

exposure.” Isbeer also explains 

that technology is playing a role 

in trading strategies. 

“EA activity continues to increase, 

along with other auto trading 

models,” he says. “Right now, I’d 

say the direction is towards AI and 

ML tool development, something 

that is impacting how brokers 

assess risk too.” 

Mohammad Isbeer 

Interestingly, Isbeer explains that 

low volatility has given simple 

strategies the space to become 

profitable once again. He cites 

the Martingale strategy as an 

example of realising significant 

profit over the past year. While 

simplicity is playing well in FX, 

reduced volatility has reduced 

crypto demand in MENA. 

“Institutional demand for crypto 

is always present to a certain 

extent because retail brokers 

want them. We’re meeting that 

demand, but overall volumes have 

been sluggish,” Isbeer says. 

Brokers are riding out the winter, 

he explains, focusing on offering 

those products via CFDs to their 

clients, and managing their risk 

appropriately. Isbeer is bullish 

about the growth of retail eFX in 

MENA. 

“Regulation is only opening up 

further, and we’re seeing several 

EU and American institutions set 

up base in Dubai due to this,” 

he says. “Demand is increasing, 

both on the retail side and 

the institutional end. For now, 

MENA continues to show great 

potential, and I expect it to only 

grow from here.” 



be an electronic interbank market 

in the region, which would act as a 

precursor to a fully-fledged electronic 

offering.” 

However, Almohri notes that the share 

of electronic trading is increasing, 

a trend he expects to accelerate. 

Blackburn echoes this view and 

highlights a few changes that have 

supported this trend. “Regional banks 

across the region have developed 

their single dealer offerings to allow 

customers to reach their branches, 

customers, and the wider community 

of multi-dealer platform users,” he says. 

“There has been a general consensus 

from MENA countries to change their 

methods of trading, and central banks 

have been key to ensuring that markets 

operate with a degree of transparency 

around them.” 

ISLAMIC FINANCE - VANILLA 

BUT IN HIGH DEMAND 

Increasing sophistication amongst 

MENA investors has affected another 

unique aspect of the region’s 

markets: Islamic finance. Demand 

for Shari’a-compliant products has 

steadily increased, with service 

providers offering both innovative and 

questionable products. 

Retail FX is an example of the latter. 

Shari’a law prohibits interest and 

gambling, both of which are present 

in copious amounts in the retail FX 

market. While brokers cannot control a 

client’s gambling instinct, they have full 

control over interest charges, and this 

leads to interesting compromises. 

Swaps, for instance, are central to 

the FX market’s functions, but several 

brokers in the region advertise swapfree 

accounts. These brokers reframe 

the swap as a client fee and execute 

the swap on the back end. Is such a 

product truly Islamic? 

The Qatar Central Bank’s Fintech Strategy 2030 details an ambitious plan to electronify the Kingdom’s financial 

infrastructure 

of balancing customer demand 

with Shari’a needs. So far, MENA 

governments haven’t commented on 

such tactics. On the institutional side, 

greater financial engineering leeway 

has resulted in the creation of Shari’acompliant 

hedges, swaps, and options. 

However, these products remain 

relatively vanilla. Bloomberg’s FXGO 

platform currently offers the trading of 

Islamic deposits and forwards (Wa’ad) 

QATAR RAMPS UP FINTECH 

STRATEGY 2030 

Qatar is a relatively silent presence 

in the Gulf region compared to the 

behemoth that is KSA and the flashy 

UAE, led by the Emirate of Dubai. 

However, the Government of Qatar 

has made regulatory moves that reflect 

the Kingdom’s ambition to be counted 

amongst its neighbours. 

The Qatar Central Bank’s Fintech 

Strategy 2030 details an ambitious plan 

to electronify the Kingdom’s financial 

infrastructure. While the central bank’s 

regulations surrounding loan-based 

crowdfunding grabbed headlines, the 

body outlined a roadmap to define 

regulations for wealth tech, eKYC, DLT 

initiatives, open banking, and digital 

banking, amongst others. 

the Kingdom driving the need for a 

sophisticated support system. The plan 

seeks to triple the number of registered 

fintechs in the country by 2027 and 

promote greater financial inclusion. 

The move also comes after Fitch 

Ratings analysts pointed out the lack of 

regulation holding back Qatar’s fintech 

sector. As FDI inflows increase in the 

region, Qatar is positioning itself as a 

viable alternative to Dubai and Riyadh. 

WHAT’S IN STORE FOR THE 

MENA? 

Despite the region experiencing 

instability and illiquidity in some 

pockets, industry analysts view the 

MENA’s prospects favourably. The Gulf 

economies’ growth is undoubtedly 

positive and is expected to turn that 

region into a financial hub. 

Dubai is well-positioned as a financial 

centre already, and with KSA opening 

its economy, analysts expect more firms 

to consider Riyadh as a potential hub. 

While localisation efforts will reduce 

expat FX outflows from the region, 

investor sophistication will increase. As 

a result, electronic FX workflows and 

automation will likely experience steady 

adoption. 

Other examples such as the approval 

for futures products reflect an attitude 

This initiative comes in conjunction with 

greater foreign investment interest in 

In short, the MENA continues to move 

forward, despite current turbulence. 


THE E-FOREX INTERVIEW 

Offering a better 

way to trade FX 

StoneX Group Inc is a diversified 

financial services firm providing 

institutional traders access to deep 

global liquidity in markets all over the 

world. We spoke with Eric Donovan, 

Global Head of Institutional FX at the 

company, to learn more about the 

business he is running and the key 

people who are helping him. 

Eric Donovan 


THE e-FOREX INTERVIEW 

Eric, you have been working in 

the financial trading industry for 

a long time. Please tell us a little 

about your background and career 

to date. 

I went to Rutgers University, close 

to NYC, which gave me some 

opportunities to work in the hedge 

fund and trading industry while I was 

still in college, so I was very lucky in 

that respect. After graduating I moved 

to Chicago and began working for an 

options market-making firm, where 

I became a floor trader in S&P 500 

options. I did that for 5 years, then 

left to start a firm that was focused 

more on automated trading systems. 

The firm did very well through the 

financial crisis and the flash crash. 

In 2014, I decided to quit trading 

and go to law school, because I saw 

the industry changing so much after 

Dodd-Frank and it was getting harder 

and harder to survive as a small firm. 

Then, kind of on a whim, I took a 

job at StoneX which I planned to 

stay at for just a few months until 

my classes started. I ended up loving 

the company, withdrew from law 

school, and have been here for almost 

9 years. That was one of the best 

decisions I ever made. 

What does your day-to-day 

job involve and what key 

responsibilities do you have? 

My energy is entirely focused 

on building the best experience 

imaginable for institutions involved 

in trading foreign exchange. That 

means building trading systems that 

continually lower our cost structure 

and improve performance, so we can 

deliver great products and services at 

a price point that provides real value. 

In addition, scale is significant so I 

also dedicate time to our sales and 

marketing efforts. 

What range of FX execution and 

Liquidity services does StoneX Pro 

offer and what mix and types of 

clients are you providing these for? 

StoneX Pro bundles everything 

needed to tap into the global FX 

market in a very simple, turnkey 

account structure. This includes 

institutional-grade liquidity in spot, 

forwards, NDF, options, NDOs, 

deliverable FX and interest rates 

swaps for corporate and financial 

institutions. Our clients range from 

asset managers, hedge funds, 

regional banks, financial institutions, 

money service businesses, and a 

global network of corporates. 

StoneX Pro has the support of 

your powerful parent company, 

StoneX Group Inc. What else do 

you think really sets StoneX Pro 

apart from other firms in this 

highly competitive business? 

StoneX Pro bundles everything needed to tap into the global FX market in a very simple, turnkey account structure 


StoneX Group: Offering a better way to trade FX 


We’ve assembled an exceptional team to provide our clients with an innovative and comprehensive FX solution 

StoneX Group Inc. is a fast-growing 

Fortune 500 company, renowned 

across almost every asset class. I 

would say the biggest advantage 

we have is the economies of scale 

with respect to balance sheet and 

having regulated entities in almost 

every jurisdiction. For example, just 

in the US we have a broker-dealer, 

we have one of the only non-bank 

swap dealer entities, an FCM, and 

a Retail Forex Dealer. I think it’s 

becoming increasingly difficult for 

firms to function in just one of these 

areas, it’s simply not cost effective 

to do so. Another major advantage 

we have as a “StoneX” business 

is the geographical distribution of 

the firm, which allows us to very 

easily place teams on just about 

every continent. This is one of the 

core values we have as a company 

— being physically located near our 

clients, allowing us to truly navigate 

local markets while also leveraging 

the scale and efficiencies of a large 

organization. 

Our global sales team is the lifeblood of our business and is led by Gerard Melia (left) in London 



Fred Allatt (right) leads sales for the Americas and is based in New York 

How important is state-of-theart 

technology in helping you to 

deliver and maintain the platforms 

and execution services you offer 

and what direct benefits are 

your clients getting from the 

investments you make in it and 

access you give them to it? 

During the venture capital boom of 

the 2010’s there were a lot of large 

investments in FX technology. There 

were so many firms trying to earn a 

small piece of every transaction they 

could touch, and many of them were 

actually very innovative. However, 

eventually you end up with a market 

that’s flooded with tech vendors, and 

way too many hands in the cookie 

jar on each transaction and the 

consumer wasn’t seeing any reduction 

in costs. I think this peaked around 

2018, and for our business we had to 

become laser focused on delivering 

the best trading environment 

without any marginal costs attached. 

Every investment we make in 

technology tends to be focused on 

price compression, allowing us to 

continually win on tighter pricing, 

while growing our own profitability on 

scale and increased volume 

Earlier this year e-Forex reported 

on how demand for your FX 

trading services has been growing 

significantly recently. What factors 

have been influencing that? 

Obviously, market volatility is a big 

factor, driven by both higher interest 

rates and geopolitical instability. We 

trade longer tenor forwards, options, 

as well as interest rate swaps, so I 

think we are even more impacted by 

the rate environment than your typical 

spot FX liquidity provider. At the same 

time, we’ve seen some very high-profile 

banks pull out of the FXPB space 

entirely, while others are pulling back 

due to a combination of regulations, 

capital usage, risk, and opportunity 

cost. This has certainly opened the door 

for us to increase our market share. 

In what ways has the FX market 

been evolving to create new 

opportunities for firms like StoneX 

Pro to come along and disrupt 

the status quo by offering more 

efficient access to institutional FX 

markets? 

The number one pain point we’ve 

tried to address in the institutional 

FX space has been the complexity 

StoneX Group by the numbers 



The number one pain point we’ve tried to address in the institutional FX space has been the complexity and 

inefficiencies of the bank FXPB model 


and inefficiencies of the bank FXPB 

model. It typically takes a year of 

legal contract negotiations to open 

an account with a bank, then you 

need to build all of your own trading 

infrastructure, procure trusted liquidity 

providers, map out all of your posttrade 

messaging, and continually 

manage limits and legal documents 

with all of your counterparties. Unless 

you are trading hundreds of yards of 

volume per year, this just doesn’t make 

sense. So we came in with the mindset 

that we already have all of these things 

and we’re really good at them, why 

don’t we bundle this into something 

our clients can plug into very quickly? 

That was the idea behind StoneX Pro, 

that you can literally open an account 

in a couple of weeks, connect to our 

high-performance infrastructure and 

full-service trading team, and trade all 

of the same products, including physical 

settlement and delivery. It’s easier, 

cheaper, and a better overall experience. 

Each year we publish important 

regional spotlights on the fastestgrowing 

global electronic FX 

trading hubs such as Singapore. 

How important are this and other 

Emerging Market regions to your 

business growth plans and why is 

StoneX Pro perfectly positioned 

to capture the opportunities they 

present? 

We’re proud that our efforts have been recognized across the industry 

Our Singapore FX desk is very 

important strategically. The growth 

potential in APAC is high and we look 

to the Singapore desk as a gateway 

to regional markets across Asia. Our 

Singapore team, which we continue 

to grow, has its finger on the pulse 

of local markets to identify specific 

regional opportunities where we can 

add value. Emerging markets have 

always been one of the cornerstones 

of StoneX across all asset classes. Our 

flexibility as a company as well as 

our risk appetite to support EMs give 

us the optimal positioning to service 



OUR SINGAPORE FX DESK IS VERY 

IMPORTANT STRATEGICALLY 

these markets. As a multi-asset broker, 

the reach of our global sales teams 

connects us directly with FX clients in 

emerging markets so in many cases, 

the market awareness of our brand is 

higher in these markets than in some 

more established ones. 

In October we launched our 

new Institutional Digital Assets 

newsletter, IDAssets to cater for 

growing interest amongst our 

readers in this fast-developing 

market. What are your opinions 

about institutional engagement 

with Digital Assets and what 

needs to be done to encourage 

more of it? 

The digital asset space is definitely 

a growth market for StoneX Pro. As 

crypto exchanges & custodians expand 

into new markets, this often increases 

the pressures on treasury teams to 

manage multiple currencies effectively. 

This has been particularly challenging 

as the banking sector pulls back due 

to its risk appetite for all things digital, 

which has created an opportunity 

for StoneX Pro to step in and provide 

the foreign exchange services needed 

by this industry. We have taken the 

approach that digital assets are a new 

emerging market, and like any other 

asset class we want to be there to 

partner with and support our clients 

with their needs. The lack of regulatory 

clarity, particularly in the US, is 

probably the biggest impediment to 

increased investment at this time, but 

we are still very much involved. 

The StoneX Pro division continues 

to win awards. What’s the secret 

behind that? 



It’s about continually focusing on our 

mission to provide a very simple and 

efficient way to access the full scope 

of FX products and services at a highly 

competitive price point. We’re proud that 

our efforts have been recognized across 

the industry and again, that’s a signpost 

to us that we’re providing significant 

value to our clients. 

You and your team have clearly 

been working extremely hard to 

build a thriving business. What 

achievements are you most proud 

about so far and what key objectives 

are you going to be focused on for 

2024? 


When we acquired Gain Capital in 2020, 

we had an opportunity to rethink who 

we wanted to be in the corporate and 

institutional FX world. We also thought 

about what the market really needed. We 

pulled together several fragmented teams 

to create a new, unified approach to our 

FX business which could be scaled across 

many client verticals and geographies. 

The people who made this happen are 

real experts, and while we are very proud 

of what we’ve accomplished over the 

last few years, I am even more excited 

about what lies ahead. We have created 

a better way to trade FX, and in 2024 

we are going to make sure that message 

reaches new markets and new clients as 

we continue our rapid growth. 

For further information about StoneX 

FX trading and liquidity solutions please 

visit: www.stonexpro.stonex.com/ 

contact-us/ 

STONEX GROUP INC. 

IS A FAST-GROWING 

FORTUNE 500 

COMPANY, RENOWNED 

ACROSS ALMOST EVERY 

ASSET CLASS 



(From left to right) Sevinc Edikci, Qian Ying Goh, Gerard Melia, Edward 

Bolton, Eric Donovan, Thomas Friesleben, Fred Allatt, Andrea Michael. 


FX On Exchanges: 

Demand grows while 

work continues to 

launch new products 


Nicholas Pratt 




There are two clear trends in the listed FX trading 

world. Firstly there is growing demand, as evidenced 

by the increased volumes for cleared FX and especially 

non-deliverable forward clearing shown in the Bank of 

International Settlements (BIS) triennial surveys and also its 

quarterly FX reviews. 

The other trend is that listed FX and OTC trading are 

increasingly housed under the same roof. For example, 

within Europe there have been mergers and acquisitions 

such as CME Group’s purchase of EBS via the acquisition 

of NEX Group, LSEG’s purchase of Refinitiv FXAll; 

Euronext’s acquisition of FastMatch and Deutsche 

Boerse’s acquisition of 360T. And many of the leading 

exchanges have put the need for a hybrid trading model 

at the forefront of their product development, typified 

by the Exchange for Physicals service developed by Eurex 

Clearing. 

BUILDING CRITICAL MASS 

Over the previous few years, Eurex Clearing, the 

derivatives arm of Deutsche Boerse, had developed a listed 

FX capability. The last time e-Forex magazine spoke to Lee 

Bartholomew, global head of fixed income & currencies 

derivatives product design at Eurex, the focus for the firm 

was on achieving critical mass for its listed FX offering. 

“The focus is still on building critical mass,” says 

Bartholomew. “We are making good progress on that 

front. A number of banks like Goldman Sachs and 

UniCredit have gone live and we have three more global 

banks in the pipeline, ready to go live before the end of 

the year. Alongside 360T, we feel we have a very clean 

and compelling offering and we are all set for accelerated 

growth in 2024.” 

Increasingly, buy-side firms are telling their sell-side 

counterparts to set up with Eurex Clearing, says 

Bartholomew. “There is a growing realisation within the 

fixed income market that listed and OTC trading can 

be complementary. That has led to a degree of comfort 

among both bank and non-bank liquidity providers 

with listed FX and that suits Eurex. We have spent the 

last several years doing the heavy lifting and building 

out the platform. Now our focus is on activation and 

implementing portfolio listing and other activities.” 

There is also a realisation among sell-side banks that listed 

FX trading is not an adversary to the OTC world. “It is not 

about competing with the banks. Increasingly, banks are 

looking to segment their trading into high touch and low 

touch. By using on-exchange trading for those assets and 


FX on the Exchanges: Demand grows while work continues to launch new products. 

“By using on-exchange trading for those assets and 

instruments with low margins and high volumes, it allows 

those banks to focus on the high-value, high-touch and highreturn 

instruments and assets,” 

“Regulations continue to foster more 

efficiency in the FX market. But you 

also have to plug into traders’ decisionmaking 

and factor that into product 

development.” 

the platform and to focus on areas 

where we can provide a point of 

GROWING BUY-SIDE 

ADOPTION 

difference.” 

As of July 2023, the CME Group FX 

futures and options market trades 

Over the previous two years, Eurex 

an average notional daily volume of 

has sought to develop cross-border 

US$81.8 billion, as opposed to $76 

agreements with other exchanges 

billion in 2021. According to CME 

to expand its international footprint, 

Group this increase is down to growing 

notably the Korea Exchange and an 

buy-side adoption of cleared FX 

agreement struck in 2021 to list KOSPI 

products. It is also an indication that 

Lee Bartholomew 

and USD/KRW derivations at Eurex, 

thereby expanding its presence in the 

more investors are using exchangetraded 

derivatives as an alternative 

Asia market and also adding more 

to OTC products to optimise funding 

instruments with low margins and high 

liquidity and extending trading hours. 

and the capital impacts of Basel II’s 

volumes, it allows those banks to focus 

implementation of SA-CCR and 


on the high-value, high-touch and highreturn 

instruments and assets,” he says. 

The reasons for the greater comfort 

with on-exchange trading are threefold, 

says Bartholomew. The sell-side 

has figured out how to embed and 

optimise technology within their 

setup to accommodate structured 

“We have always been open to strategic 

alliances,” says Bartholomew. “We want 

to be the incumbent destination for 

euro crosses, for the Scandi currencies 

and for other instruments or currencies 

where we have a strong presence. We 

have an expanding client base in Asia 

but we are not looking to compete 

directly with Singapore Exchange (SGX). 

Uncleared Margin Rules (UMR). YTD 

2023, CME Group has cleared 98.5% 

of the global volumes in EUR/USD 

FX futures according to FIA data; the 

remaining 1.5% was shared across 

another 5-10 venues that also offer the 

contract. 

However, there is also a common 

themes and products. “All the verticals 

There is no point trying to break into 

misconception, states CME Group , as 

are integrated,” says Bartholomew. 

new markets if we don’t possess a 

regards liquidity and the belief that FX 

“Electronic trading is more prevalent in 

distinct advantage.” 

futures are not liquid enough to trade 

listed markets and that makes it easier 

Bartholomew says he has spent some 

on exchange and are better traded OTC. 

to integrate workflows. And there is 

time on making the Eurex message 

“While there is clearly a role for both 

more comfort with the plug and play 

clearer when it comes to listed FX. “It 

futures and OTC venues in liquidity 

model which allows sell-side banks to 

is still a very nascent business and you 

provision, it is useful to place the CME 

automate more of their operations and 

cannot be all things to all people. It is 

FX futures market within the context 

to focus more on high-touch trades.” 

about simplifying our overall strategy. 

of the leading OTC FX venues, using 

We feel there are two markets where 

traded volume as a proxy for liquidity,” 

Another trend is that ETFs have 

we want to be global and where we 

they say. 

become more prevalent and they 

feel we can create the best value for the 

are becoming multi-currency which 

end customer – credit and FX. 

The exchange cites a working paper 

creates a rebalancing risk. “The 

published by the Bank of International 

ecosystem of listed products is evolving 

“Basis trading is something people 

Settlements (BIS) earlier this year which 

and people are working out how to 

want to do – we see that in portfolio 

found that “a growing number of 

monetise aspects of that market,” 

trading - ETFs in the US and FX and 

market participants of all types now 

says Bartholomew. “We try to work 

OTC and the listed worlds and regularly 

seem to consider currency futures 

collectively and collaboratively with 

trade basis. If you are able to create 

traded on the CME as at least a close 

market participants to deal with 

products that are flexible, you can then 

cousin of the primary [spot FX] central 

evolving trends. We are trying to grow 

look at what service enhancements 

limit order book (CLOB) venues”. 

the number of apps that we have on 

you can add,” says Bartholomew. 

Furthermore, CME Group states that 


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“An increasing number of new participants, particularly from 

the hedge fund and asset manager community, are looking 

to access futures liquidity to solve margin and capital 

challenges.” 

Paul Houston 

the robust liquidity and use of its 

CLOB as a complement to the Block & 

EFRP activity is vital for a good client 

experience and trading efficiencies. 

THE GROWTH OF BITCOIN FUTURES 

US-based exchange operator Cboe Global Markets is 

set to introduce trading in margin futures on bitcoin 

(BTC) and ether (ETH) in January 2024. The trading 

and clearing will be handled by Cboe Digital, the 

exchange group’s virtual assets subsidiary which was 

given permission by the Commodity Futures Trading 

Commission in June to offer margined crypto futures. 

Margined trading allows investors to post a percentage 

of their total position before trading, as opposed to 

fully collateralised futures contracts. According to the 

exchange, it is the first time a digitally-native exchange 

in the US has offered such a product. 

Cboe also claims to have the support of several trading 

firms, both traditional and crypto-focused, such as 

StoneX Financial, Cumberland DRW, Jump Trading 

Group, Marex and Wedbush. Cboe Digital president 

The firm, robust liquidity in the CLOB 

is available on a truly all-to-all credit 

agnostic basis which combines with a 

huge ecosystem of over 90,000 traders 

to provide benefits such as zero reject 

rates and the ability to trade passively. 

In 2022, almost two-thirds (63.1%) of 

hedge fund and asset manager volume 

was traded passively in CME FX futures 

and 70.4% of volume was traded 

passively in CME FX options. Group 

Liquidity is more than just volume 

though, says CME Group, citing reject 

rates, market impact, the ability to trade 

passively and the diversity of the trading 

ecosystem as “hugely important” 

John Palmer described the development as a “significant 

milestone” for the company. “We believe derivatives will 

foster additional liquidity and hedging opportunities 

in crypto and represent the next critical step in this 

market’s continued growth,” he said. 

The move has also been welcomed by a number of 

trading firms. Chris Zuehlke, global head of Cumberland 

factors for traders. Furthermore, CME 

Group states that its use of CLOBs 

means that there is diversity of users, 

zero reject rates and the ability to trade 

passively. In 2022, almost two-thirds 

(63.1%) of hedge fund and asset 

manager volume was traded passively 

in FX futures and 70.4% of volume was 

traded passively in FX options. 

According to Paul Houston, global head 

of FX products at CME Group, many 

of its customers have long recognised 

the liquidity benefits of CME FX futures 

as a complement to OTC activity. The 

difference in 2023 is that there is now 

the same recognition from the buyside. 

“An increasing number of new 

participants, particularly from the hedge 

fund and asset manager community, 

are looking to access futures liquidity to 

solve margin and capital challenges,” 

said Houston. 

DRW, said that “providing secure access to regulated 

futures markets is key to maturing this nascent asset 

class and enabling broader institutional participation”. 

Thomas Texier, head of clearing at Marex said 

“there is customer demand for these products” and 

“Cboe Digital’s margin futures launch will help bring 

competitive technology and innovative solutions to 

regulated markets”. 

And while this may be true, the majority of institutional 

interest in the US remains focused on the prospect of 

a crypto spot ETF being approved by the Securities and 

Exchanges Commission (SEC). 

BlackRock is the latest asset manager to file with the SEC 

for such an ETF and in its application the asset manager 

highlighted a perceived contradiction between the 

regulatory treatment of crypto futures and crypto spot 

ETFs. 

“Given that the Commission has approved ETFs that 

offer exposure to ETH futures, which themselves are 

priced based on the underlying spot ETH market, 

[BlackRock] believes that the Commission must also 

approve ETFs that offer exposure to spot ETH,” states the 

BlackRock application. 





“The increased volatility of Asian currencies due to divergent 

monetary policies across central banks, alongside geopolitical and 

economic uncertainties, have led to heightened risk management 

and hedging activities across our key SGX FX futures contracts.” 

VOLATILE MARKET 

CONDITIONS 

Alongside the evolving regulatory 

regimes as a result of UMR and 

SA-CCR which has led to investors’ 

increased use of listed FX futures to 

help reduce capital costs, another 

headwind for listed FX has been the 

volatile market conditions, says KC 

Lam, global head of FX rates at SGX 

Group. “The past year has seen one 

of the most volatile global interest rate 

rises and inflation in recent history,” he 

says. 

“The increased volatility of Asian 

currencies due to divergent monetary 

policies across central banks, 

alongside geopolitical and economic 

uncertainties, have led to heightened 

risk management and hedging 

activities across our key SGX FX 

futures contracts. Notably, activity 

and liquidity from US and European 

market participants has been on the 

rise, with over 40% of SGX FX futures 

traded in US and European trading 

hours.” 

SGX has looked to build on this 

KC Lam 

increased demand by launching two 

new market data offerings – the SGX 

Trade-Weighted CNY Index that tracks 

the performance of a basket of five 

major trading partners of China, and 

the SGX Trade-Weighted INR Index that 

tracks the performance of a basket of 

five major trading partners of India. 

The exchange has also looking to 

improve its trading platform Titan 

to support the increase in products, 

participants and volumes, including 

extended trading hours, enhanced 

risk controls and system safeguards to 

help market participants manage their 

trading and clearing positions round 

the clock. 

And more recently it has focused on 

market structure improvements for FX 

derivatives. These include enabling bait 

orders in our trade registration system 

for SGX USD/CNH Futures to improve 

price discovery and advertise the 

liquidity available in the marketplace. 

“This has resulted in tighter top-ofbook 

quotes especially for longer 

tenure contracts. This will also help 

create implied out orders based on an 

outright together with a spread order, 

which will increase liquidity across the 

curve,” says Lam. 

“To cater to firms that utilise different 

Trading Codes or brokers to route their 

orders, we enhanced our Self-Trade 

Prevention (STP) feature to include 

a higher level of STP at the Trading 

Group level (STP-TG); preventing orders 

from participants that belong to the 

same STP-TG from matching,” says 

Lam. “To address feedback from OTC 

participants wanting to engage in 

cross-product strategies, we launched 

USD/INR month-end contracts, making 

us the only international exchange to 

offer conventional USD base currency 

quotes.” 

“To make it easier for participants 

to transact in large sizes without 

impacting the price of the underlying, 

we implemented the Titan OTC RFQ to 

facilitate block trades, allowing larger 

trades to execute more quickly and 

efficiently. And to enable clients to trade 

at-reference to an IOSCO benchmark 

and participants to enter and exit 

positions based on a single price point 

with a deep pool of liquidity, we have 

embarked on delivering the ability to 

trade at a reference rate,” says Lam. 

“To enable clients who would like to 

replicate OTC FX forward positions but 

using the listed cleared futures format, 

SGX has introduced FlexC FX futures 

allowing participants to effectively 

mitigate counterparty credit risk with the 

flexibility of retaining bilateral trading 

relationships. This brings about lower 

margin costs and capital requirements 

and at same time enhancing capital and 

operational efficiencies,” says Lam. 

Lam also referenced the steps taken 

to widen the exchange’s international 

footprint, attract new clients and grow 

their FX products and services. “As 

regulatory developments such as Basel 

III SA-CCR and UMR Phase 6 came into 

full force, we drove industry discussions 

locally and globally to educate clients on 

navigating changing regulations,” says 

Lam. “We also publish comprehensive 

educational material on UMR and SA- 

CCR on our website, including steps on 

how clients can utilise our derivatives to 

increase capital efficiency.” 

Lam also says that the exchange 

continues its ambition to bridge the 

FX OTC and futures worlds. “We are 

the only FX futures exchange in Asia 

with an OTC FX trading venue and 

full OTC FX workflow automation. We 

also launched SGX CurrencyNode, an 

FX electronic communication network 

that connects global participants 

anonymously to unique and deep OTC 

FX liquidity pools.” 


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: 


FX Swaps 

The only constant is change 

e-Forex speaks with Stephan von Massenbach, Chief Revenue Officer at DIGITEC, about 

the numerous changes that are taking place in the FX Swaps market. Stephan talks about 

the increasing client demand for electronic Swaps prices, trader workflow automation, 

implementing advanced technology to deliver accuracy and speed, making technology 

available to regional banks using SaaS, and the growth of the interbank market. 


Additionally, the rise in interest rates 

and longer-term yields has amplified 

this move and contributed towards 

increasing volumes in FX Swaps, as 

far-side clients have sought to hedge 

FX exposures. 

As the FX Swaps market has grown, 

clients have increasingly demanded 

that their relationship banks provide 

liquidity across multiple currencies and 

tenors. When the market was smaller, 

banks used to price FX Swaps manually 

or use Excel, but the increased 

volume of FX Swaps has led to more 

electronic trading and an interest in 

more efficient and scalable technology 

solutions. 

What is the impact of automation? 

How is the FX Swaps market 

evolving? 

The latest BIS Triennial survey showed 

that FX Swaps accounted for $3.8 

trillion per day in April 2022. (See chart 

on facing page). 

Stephan von Massenbach 

Traditionally, repos and money markets 

were seen as important instruments 

for firms looking to roll, hedge, or 

fund their positions. Over the past few 

years, there has been a sustained move 

towards FX Swaps fulfilling this need as 

a source of global funding. 

The FX Swaps market is now at a point 

where the majority of client trades are 

electronic, and workflows automated 

(to increase efficiency and make more 

prices to clients). These greater levels of 

automation and electronic trading have 

led to increased market velocity, which 

translates into a greater need for speed 

and lower latency, as markets react 

more quickly to events. 



When it comes to FX Swaps and 

Forwards, the result is that trading 

firms need fast, scalable, and robust 

technology to manage this change, 

where thousands of data points 

need to be accurately priced along 

a forward curve. As an example of 

the scale of the challenge, a large 

Market Making bank can price up to 

20,000 data points, which quickly 

adjust when the market starts to 

move. 

Old technology and models that 

solely rely on prices based on FX 

Swap points published by brokers are 

particularly vulnerable, as these data 

points are not only among the last to 

update in times of movement, they 

also do not cover relevant points such 

as the central bank dates and turns 

that show the largest effect. 

How is the use of data changing? 

Data is vital to be able to accurately 

price along the forward curve. DIGITEC 

and 360T partnered to launch Swaps 

Data Feed (SDF), which filled a gap 

in the market, providing a unique, 

independent, and reliable source of 

FX Swaps data, taken from major FX 

banks. This enables clients to build their 

own fully automated and accurate 

real-time curves.. SDF is based on 

participating banks raw pricing, which 

represents Interbank quality. 

Modern pricing models also require 

the speed and accuracy that are 

found in the STIR Futures market. 

Instruments like the one-month 

and three-month USD SOFR Futures 

or the still prevalent three-month 

EURIBOR Futures increasingly 

form the backbone of FX Swaps 

pricing. They do however need to 

be supplemented with market data 

from other assets, creating the need 

for a pricing engine that is able to 

combine multiple data assets and 

sources into one cohesive model. 

While the short end of the curve 

is based on Futures, the long end 

required to price Cross-Currency Swaps 

will need to be built out of Swaps. 

DIGITEC is seeing growth in the 

regional bank segment. Why is 

this? 

In the past, many regional banks 

could not justify the investment in 

on-premise applications deployed 

and managed on a bank’s own server 

infrastructure, and instead used Excel 

to price FX swaps. The recent adoption 

of SaaS applications deployed in 

the cloud makes specialised pricing 

engines more affordable and accessible 

for an increased number of firms, 

helping the market to finally move 

away from relying on Excel. 

Over the last two years we have seen 

much of our new business growth 

come from the regional bank sector, 

following the launch of D3 Lite 

(a SaaS version of the D3 pricing 

engine) to enable them to price 

FX swaps and forwards, providing key 

functionality in an intuitive web-based 

GUI, with auditing functionality. 

Is interbank e-trading the final step 

in the electronic evolution of FX 

Swaps? 

For FX Swaps to automate further, 

there is a requirement for an efficient 

and increasingly more automated 

interdealer FX Swaps market to help 

firms make markets to clients and 

efficiently risk manage their positions. 

With this in mind, 360T and LSEG offer 

electronic interdealer FX Swaps trading 

venues, and many other markeplaces 

are looking into establishing new 

and additional venues . At DIGITEC 

we developed D3 OMS, to increase 

workflow automation and enable 

traders managing FX Swaps risk to 

connect directly and efficiently place 

orders in these interdealer FX Swaps 

venues. 

By launching D3 OMS we are making 

trading workflows more efficient and 

flexible. As with any market that is 

evolving to a more electronic structure, 

we expect the result to be increased 

volumes on electronic interbank 

matching platforms. This in turn will 

drive increased market liquidity, greater 

participation, improved client pricing 

and risk management, and for the FX 

Swaps market to grow for the benefit 

of all parties. 

We launched D3 OMS in September 

this year and are seeing a great deal 

of interest, some from our existing 

bank clients and some completely new 

relationships which plan to use D3 

OMS as a standalone product. 



Corporate 

treasury 

automation: 

How 

technology 

is solving 

pressing 

needs 

By Vivek Shankar 




Treasury automation has consistently 

been a hot topic since the COVID-19 

pandemic hit. Institutions embraced 

a wave of electronification in several 

areas, and treasury processes were 

no exception. However, corporate 

treasurers soon ran into a ceiling. 

While automating internal processes 

was straightforward, overall cash 

management efficiency depended 

on other departments in their 

organisations embracing automation. 

For instance, while firms can automate 

cash projection, the process depends 

on collection efficiency, a largely 

manual task. 

With volatility increasing worldwide, 

treasurers need automation more than 

ever, something Bob Stark, Global 

Head of Strategy at Kyriba, notes. 

“Corporate treasurers are focused 

on reducing the impact of currency 

volatility on their balance sheets, 

income statements, and cash flow,” 

he says. 

“With FX volatility remaining 

stubbornly high, treasury teams 

must maximise the impact of natural 

hedging while reducing the cost 

of derivative hedging programs to 

meet increased resilience to currency 

markets and improve the effectiveness 

of their FX program.” 

These factors have pushed the 

automation wave further, with service 

providers rising to fill corporate 

treasury needs. 

HOW AUTOMATION HELPS 

Matti Honkanen, Head of Next Gen FX 

at Nordea, says that time is a constant 

stumbling block for treasurers. 

“According to our survey of corporate 

treasurers, there is a big mismatch 

between where the treasurers use 

time and where they would like to. As 

a rule, treasurers would like to play a 

more strategic role.” 

“That is not possible if they don’t free 

up time from the time-consuming stuff 

that they are primarily responsible for 

and that is possible to automate with 

the e-FX technology,” he continues. 

“Another driver (of automation) is 

the need to do liquidity and risk 

management more frequently and 

accurately, which is very tough with 

a manual process. There are plenty of 

technological solutions that can help 

with this.” 

When asked what drives 

electronification in treasury processes 

right now, Niels van Daatselaar, Cofounder 

and CEO of TreasurUp, points 

to the banks. “The reality is that 

banks are the primary investors in the 

technology required to increase the 

levels of digitization or automation 

available to corporations to deploy 

within their operating environment,” 

he says. “Where there is the scale to 

justify it, Corporate Treasurers are more 

inclined to invest in straight-through 

processing of workflows between 

their TMS or ERP platforms and the 

transaction solutions delivered by the 

banks.” 

Like Honkanen, he explains that 

treasurers have plenty of options to 

choose from. There is no doubt that 

automation delivers benefits. But, in 

which areas does it specifically help 

treasurers? 

Stark says, “Streamlining extraction 

and structuring of exposure data 

from the ERP, integrating online trade 

portals with the treasury management 

system, and automating the 

designation, valuation and accounting 

for hedges. Automation not only 

improves productivity but also delivers 

accuracy in an area where compliance 

is paramount.” 

van Daatselaar dives deeper into the 

data-driven advantages. “Storing 

more contextual data around the cash 


Corporate treasury automation: How technology is solving pressing needs 

“Automation not only improves productivity but also delivers 

accuracy in an area where compliance is paramount.” 

to morph into a “Whole of Treasury” 

decision support framework with 

multi-product execution capabilities.” 


Bob Stark 

flows that drive FX trades can lead 

to incremental services and decision 

support tools,” he says. “Banks have 

previously been unable to deliver 

these due to the vanilla data that 

has historically accompanied trade 

instructions.” 

He goes on to illustrate an example. 

“We are working on solutions for 

banks to deliver to clients that 

enable rules to be configured by a 

Corporate Treasurer,” he says. “They 

can automatically calculate and adjust 

a net hedge position, complete cash 

flow forecasts based on real data, 

and then automatically sweep excess 

balances back to base currencies or 

into money market instruments.” 

Honkanen believes automation’s timesaving 

benefits are obvious, but not 

readily apparent. “Whenever there 

is any recurring task that is taking 

people’s time,” he says, “or whenever 

they think something should be more 

systematic, if it just didn’t take so 

much time, it is wise to investigate 

how the automation solutions could 

help.” 

While time savings are an obvious 

benefit, Honkanen explains they extend 

further. “The benefits are twofold,” he 

says. “Either reduced costs via improved 

liquidity and risk management, or the 

ability to focus on more value-added 

and strategic themes when operations 

are more efficient.” 

van Daatselaar opines that 

automation can change the nature 

of the corporate FX portal. “FX risk 

management and funding are a 

small proportion of the challenges a 

Corporate Treasurer needs to handle,” 

he says. “We are convinced that the 

FX portal used by clients will begin 

EXTENDING AUTOMATION 

Corporate treasurers currently have a 

good idea of which processes stand 

to benefit from automation. But are 

there any underrated workflows that 

deserve more automation? Kyriba’s 

Stark believes so. 

“FX exposure management, especially 

quantifying the impact of currency 

on the balance sheet, is an area most 

treasury teams can improve upon,” 

he says. “Organisations generally do a 

good job with their cash flow hedges, 

typically struggling only with the 

estimation of future cash flows so they 

can be as effective as possible with 

their hedging.” 

“Yet,” he continues, “balance sheets 

are a completely different process 

requiring a separate data strategy and 

unique tools to extract, organise, and 

quantify exposures within balance 

sheet accounts. This allows treasurers 

to make more informed decisions 

about natural hedges that can be 

leveraged and derivative positions that 

can mitigate remaining exposures and 

reduce value at risk.” 

van Daatselaar doesn’t label any 

specific workflows when asked, 

believing treasurers must approach the 

question from a risk perspective. “It’s 

the management or orchestration of 

data that drives the decision-making 

where Corporate Treasurers and 

banks need to start,” he says, “before 

taking advantage of readily available 

electronic execution capabilities.” 

With volatility increasing worldwide, treasurers need automation more than ever 

“Taking control of how data is 

collected across an organisation,” 

he continues, “processing it so that 

balance shortfalls and exposure to 

currency volatility are as close to 

real-time as possible, then taking the 


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Source: Nordea’s 2023 Treasury Survey: Brave new world 


“Another driver of automation is the need to do liquidity and 

risk management more frequently and accurately, which is 

very tough with a manual process.” 

Matti Honkanen 

appropriate actions to mitigate that 

risk is vital.” 

Honkanen states that defining 

the scope of automation can be 

challenging and suggests a set of 

steps to work through the decision. 

“I encourage you (treasurers) to start 

asking yourself 

“What are the tasks where we have 

some obvious solutions available”, 

“what are the tasks that take the most 

time”, and “What are the things that 

we should do more frequently and 

more accurately?” he says. 

“I would also urge you to start 

with the ones that are easiest to 

implement. It does not need to be a 

huge improvement, the key is to get 

going. Then you will learn how you 

can tackle even nastier problems.” 

THE SOLUTIONS LANDSCAPE 

If defining the scope of automation 

is challenging, choosing a solutions 

provider is even more so. van 

Daatselaar notes that with costs 

pushed to lows over the past 20 years, 

price should not contribute majorly to 

a firm’s buying decision. 

“Credit relationships are a stronger 

driver than ever when it comes to 

the direction of FX flows,” he says. 

“Beyond credit, what does a bank 

bring to the table in terms of multichannel 

access? Decision support? 

Automation? Passing data through 

from an ERP platform and scheduling 

workflow that only needs exception 

handling has to be part of the solution 

set that Treasurers aspire to embed.” 

He notes that TreasurUp has seen 

an increase in banks reviewing their 

legacy infrastructure to meet new 

demands. “Transformation programs 

that extend into the broader banks’ 

technology delivery are commoditizing 

the microservice-enabled environment 

needed to deliver nimble digital 

platforms,” he says. 

van Datselaar continues, “Many banks 

are already curating a subset of fintech 

partners to combine with in-house 

solutions and deliver an enhanced 

FX experience that transcends the 

traditional payments and payments 

hedging booking tools.” 

Stark notes that the best solutions 

provider helps treasurers land a big 

impact on their organisations. “A 

good solutions provider empowers 

the treasurer to be the chief data 

officer,” he says. “This helps them 

communicate to the CFO, CEO, and 

the Board the impacts of currency on 

revenue, earnings, and cash flow and 

how these risks have been and will 

continue to be managed.” 

He explains that this view stems from 

a belief that a solutions provider 

must assist in transformational 

improvement, not just automation. 

“Mitigating FX risk is a constantly 

changing program for most 

organisations in response to rapidly 

volatile currency markets,” he says. “FX 

risk management is not an automation 

story; it is about supporting the 

treasury’s data strategy.” 

“As always, the most important 

question in choosing any partner is 

who is reliable,” Nordea’s Honkanen 

says. “Among those who pass this first 

criterion, you should choose the ones 

that can help you with problems that 

matter most. And then again we come 

back to the question of what activities 

you should automate.” 

Areas with the greatest efficiency improvement potential 

He cautions against overthinking 

this. “The most important thing is 


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“We are convinced that the FX portal used by clients will 

begin to morph into a “Whole of Treasury” decision support 

framework with multi-product execution capabilities.” 

Niels van Daatselaar 

for you to start doing stuff, first the 

small wins and then increasing the 

bets,” he says. He points to Nordea’s 

integration abilities as an example of 

reliability. 

“Even if our guiding principle is to 

use modern technical standards, 

we acknowledge the fact that the 

old legacy technologies are still 

ubiquitous,” he says. “For example, 

the most critical requirement for 

any solution is that it is easy to 

integrate into an Excel spreadsheet 

that is still the backbone of all the 

corporates.” 

“Even if the solutions would skip 

Excel altogether, the first step is to 

make sure the customer can try out 

the new solution without abandoning 

the good old Excel spreadsheet. And 

of course, there are plenty of other 

old standards that are almost equally 

relevant for quite some time, like 

XML, FTP, etc.” 

THE IMPACT OF NEW 

TECHNOLOGY 

AI, DLT, blockchain. Technology 

is evolving rapidly, and FX has 

already witnessed the entry of 

these examples of advanced tech in 

different applications. Blockchain and 

DLT solutions are increasing in the 

cross-border payment and settlement 

niches, while AI is leaving a mark in 

analytics and algo-based execution. 

van Daatselaar believes AI will soon 

spread to treasury management. 

“Artificial intelligence will have a 

tremendous impact on the way 

Treasuries operate in the future,” 

he says. “The ability of this 

technology to identify drivers of 

successful outcomes and amplify the 

redistribution of learnings across the 

Corporate Treasury community cannot 

be understated.” 

He also notes the human impact 

of this development. “Professionals 

used to take months or years to earn 

their stripes working within junior 

roles, building up a knowledge base 

that justified a promotion or transfer. 

Shortly, this career development 

model will turn on its head.” 

Stark echoes van Daatselaar’s views 

on AI. “APIs and AI will have a greater 

impact on treasury digitisation than 

blockchain and DLT, as the biggest 

opportunity for treasury teams is to 

leverage data to make more efficient 

and intelligent FX risk decisions,” he 

says. 

Does this mean blockchain won’t 

have any impact? “Blockchain 

will support greater transparency 

for trading and settlement of FX 

transactions,” Stark responds, “yet 

the greater benefit for treasury teams 

will be to make more data-driven 

decisions around how to protect cash 

flow and earnings - a responsibility 

which artificial intelligence is perfectly 

suited for.” 

When asked about the impact 

blockchain and DLT will have on 

treasuries, van Daatselaar notes his 

excitement about CBDCs and their 

impact on settlements. 

“CDBCs will power the broader 

adoption of Blockchain across banking 

infrastructure,” he says, “tokenization 

will democratise access to unlisted 

assets, and debt collateral will be 

eventually managed across borders 

without the need to participate in 

traditional FX trades.” 

“We can expect the concept of STP 

to evolve from today’s automated file 

updates,” he continues, “to an atomic 

settlement of cross-border capital 

flows visible in real-time on a bank’s 

digital front end.” 

FOCUS ON THE BASICS FIRST 

While he’s excited about new tech 

development, Honkanen cautions 

that firms must get the basics right 

first. “I think 99% of the discussion 

about new technologies has no 

relevance for treasuries,” he says. 

“You should focus on automating the 

boring daily stuff with pretty boring 

technological solutions. If you don’t do 

that and start small, there will not be 

any new big technology that will save 

you and take you to a new level. The 

most successful treasuries are those who 

focus on getting things done, not the 

ones who ignore relevant problems.” 

No matter where a firm’s corporate 

treasury workflow lies, technology 

can introduce more efficiency. A firm’s 

technological focus depends on its 

current position, something Honkanen, 

Stark, and van Daatselaar believe 

treasurers should rigourously examine. 

Ultimately, the results of that 

examination determine whether 

advanced tech can solve their pressing 

issues. 



Crossing the Security Rubicon: 

How Managed Service Providers 

are hastening banks’ migration 

to the Cloud 

NETWORKS, HOSTING & CONNECTIVITY 

The notion that ‘freedom lies on the other side of fear’ holds true not only in human 

psychology but also in the context of financial business. In the FinTech world, cloud technology 

is freeing banks and financial institutions into greater flexibility, resilience and, prudently 

done, profitability. To achieve this, they have to conquer fears about security and regulatory 

compliance. 

BARRIERS TO MIGRATION 

Not too long ago it was considered 

a highly risky proposition to store, 

manage and process sensitive 

financial and customer data in the 

cloud. In addition, the onus for 

compliance rested squarely on banks’ 

shoulders. Relinquishing control of 

their environment while remaining 

responsible for their own security 

policies and procedures felt like too 

much of a risk. 

GROWING TRUST 

Nevertheless, to have any competitive 

relevance, banks and other financial 

Oscar Neill 

institutions must be able to innovate, 

streamline their operation, scale up 

or down, and ensure the highest 

levels of quality, performance, and 

customer service, all with the greatest 

agility and adaptability, and without 

compromising security. 

In recognition, specialist financial 

infrastructure providers are dedicated 

to facilitating not only operational 

efficiency but also secure and 

compliant governance up and down 

the supply chain. 

Oscar Neill, Chief Information and 

Security Officer for Beeks Group 

comments: “A dedicated financial 

services cloud provider understands 

the needs and pain-points of its 

client’s business as well as the controls, 

frameworks and compliance demands 

incumbent upon it. It keeps abreast 

of new regulations, forges securityfocused 

partnerships, and ensures its 

own security accreditations and quality 

standards are as current, auditable and 

dynamic as possible.” 

MSP OFFERINGS 

Consequently, the preparedness of 

Managed Service Providers (MSPs) 

to shoulder much of the compliance 

burden on behalf of their customers is 

beginning to influence the increasing 

level of comfort and trust among 

banks in cloud migrations. 

Here are a few key examples of how 

financial MSPs are doing this: 

Integrated pillars of security 

Describing how cloud security 

capabilities are key pillars of his 

company’s flexible architecture, 

Neill says: “Our capital markets 

dedicated private and hybrid 

Infrastructure as a Service (IaaS) 

solutions have integrated market 

leading malware protection and 

vulnerability scanning capabilities 

to ensure secure configurations 

for our customers’ infrastructure. 

Zero Trust access management, 

firewalling, intrusion detection 

and prevention, and Security 

Information and Event Management 

(SIEM) are all baked into our 

solutions from day one. Unlike 

public cloud infrastructure sharing, 

Beeks’ private cloud provision 

puts us in complete control of our 


NETWORKS, HOSTING & CONNECTIVITY 

clients’ environment security, giving 

us the confidence that there is endto-end 

protection.” 

Source:Beeks Group 

Compliance Frameworks 

ISO 27001 and SOC 2 are important 

complementary frameworks for cloud 

service providers to follow. 

ISO 27001 is the international 

standard for information security 

management, governing how overall 

security is defined, implemented, 

operated, controlled, and improved 

within an organisation. It is an ISO 

certification that is audited annually 

and recertified every three years. 

SOC 2 defines criteria for managing 

customer data based on five ‘Trust 

Service Principles’ (TSC), Security, 

Availability, Processing Integrity, 

Confidentiality and Privacy. It differs 

from ISO 27001 in that it evaluates 

the effectiveness of an organisation’s 

security controls and processes 

over a specific period of time. 

Commenting on Beeks’ accreditation 

status Neill says: “Beeks achieved ISO 

accreditation in 2020 and is aiming 

to receive our first SOC 2 report in 

February 2024. 

SOC 2’s transparent and independent 

audit process gives clients and 

prospects compelling evidence about 

how our security controls actually 

work and operate. This gives clients 

more dynamic, detailed, and timely 

operational information to review for 

their own compliance.” he explains. 

5 main requirements of DORA 

experience in security operations reporting, business continuity and 

for government and private sector operational resilience testing. Our 

environments and were named Global most recent large-scale Exchange 

Microsoft MSSP partner of the year in Cloud implementation for 

2023.” 

Johannesburg Stock Exchange is a 

good security case study to highlight 

Offering rapid threat detection and these capabilities. However, we are 

response for incidents involving not resting on our laurels and have 

credential theft, anomalous 

engaged an independent audit firm 

behaviours, and malware propagation, to conduct gap analyses to assess our 

BlueVoyant gives Beeks a head start DORA readiness.” 

in threat intelligence sharing, which is 

of increasing importance in ensuring DEDICATED SERVICES VS PUBLIC 

robust and resilient infrastructures CLOUD 

across supply chains. 

“Of course, public cloud hyperscalers 

will also offer highly accredited 

EARLY ADOPTION OF THE DIGITAL solutions to tier 1 participants,” 

OPERATIONAL RESILIENCE ACT comments Neill, “but not 

(DORA) 

necessarily with the correct scope 

of understanding of secure and 

DORA is an EU financial regulation resilient ultra-low latency and 

which comes into full force in January high-performance environments. 

2025. According to the wording For example, AWS might advertise 

of the Act itself it will define rules fully redundant availability zones, 

on the five key pillars; financial ICT but if their customers are not 

risk-management, incident reporting, deploying across multiple availability 

operational resilience testing, ICT zones, they will not have access to 

third-party risk monitoring and the redundancy. Dedicated MSPs 

information and intelligence sharing, can guide banks away from these 

to safeguard the soundness of the misleading risks, and actually stipulate 

entire financial system. 

redundant architectures.” 

Defence in Depth 

Highlighting Beeks’ trusted 

partnerships and multi-layered 

approach to security controls Neill 

explains: “We’ve partnered with 

US-based Managed Detection and 

Response (MDR) specialist BlueVoyant 

to complement our threat-detection 

capabilities. Their team of security 

analysts each has at least 10 years’ 

“DORA will put further pressure 

on providers and suppliers to align 

their products and services with 

the necessary controls to comply 

with the regulation,” says Neill. 

“Beeks is already getting ahead on 

this by aligning our solutions to 

ease the sales journey and reassure 

banks procurement teams. We’re 

already doing much of the incident 

Neill concludes: “We are arriving in 

an age where banks are realising 

that not only can cloud technology 

provide them with a level of flexibility, 

security, and resilience difficult to 

achieve with legacy on-premises 

solutions, but that generic cloud tech 

doesn’t go the extra mile that their 

infrastructure needs. Beeks is Ready 

to fill that gap.” 


Achieving and maintaining 

an ultra-low latency FX 

trading infrastructure 


Paul Golden 


Achieving ultra-low latency is only half the battle for trading firms – the real challenge lies 

in maintaining speed in the face of multiple potential sources of delay and other challenges 

ranging from trading partner limitations and technological advances to budgetary constraints. 

Paul Golden investigates. 





Achieving and maintaining an ultra-low latency FX trading infrastructure 

“Achieving ultra-low latency requires a holistic approach that 

meticulously optimises each step from data transmission to 

execution” 

Alexander Culiniac 

Ultra-low latency trading can be 

defined as a system capable of 

processing data in nanoseconds, 

compared to standard low latency 

which is measured in milliseconds 

or microseconds. Bridging this gap 

is expensive, though, and requires 

specialised hardware and software. 

“It is not just about going faster; it’s 

about designing a sleek, custom built 

engine capable of conquering those 

tiny fractions of time that make all the 

difference in high stakes trading,” explains 

Ariel Silahian, Director of Electronic 

Trading at SiS Software Factory. 

You can pay to be as close to the 

exchange as possible, but with 

equitable access you can only get 

as close as other participants states 

Gordon McArthur, CEO of Beeks 

Group. “If you have fixed latency 

budgets then your competitors 

generally do as well, so ultra-low 

latency is about ensuring all other 

elements of your trading system are as 

fast as possible,” he says. 

The number of participants in 

the market at different stages of 

implementing ultra-low latency 

limits the benefits since interactions 

between two parties will only be 

as fast as the slowest participant 

observes Alexander Culiniac, CTO/ 

Managing Director of the commercial 

banking & payment product business 

group at SmartTrade Technologies. 

ATTENTION TO DETAIL IS VITAL 

“An FX trading platform must contend 

with various latency types, such as 

network, propagation, processing, and 

software-related delays,” says Culiniac. 

“Achieving ultra-low latency requires 

a holistic approach that meticulously 

optimises each step from data 

transmission to execution.” 

The primary users of these systems 

include high-frequency trading 

firms, hedge funds, and market 

makers, although as the value of 

improved performance rises relative to 

infrastructure costs, firms across the 

sell-side and buy-side are looking to 

achieve ultra-low latency. 

Silahian notes that the decentralised, 

fragmented nature of the FX market 

presents some specific challenges. 

“Unlike equities, FX is more about 

exploiting delayed prices across 

different platforms,” he says. 

“Execution speed is generally a little 

slower - even the fastest margin FX 

broker isn't as quick on the draw as 

Nasdaq. In addition, looser regulation 

in FX leads to protective measures 

by market players against high speed 

trading strategies, such as speed 

bumps or last look.” 

“The primary protocol for FX market 

data and trading is slow, lacks traceable 

timing, and is peer-to-peer rather than 

multicast observes McArthur. “Some 

FX markets have started to offer lower 

latency multicast market and binary 

trading protocols, but these are still 

in the minority,” he says. “With no 

single source, it takes a lot more time 

and effort to apply the methodical 

approach to ensuring latency-tuned 

access between participants.” 

Specific factors that impact latency 

include: 

• Slow infrastructure (servers/network 

cards/switches) 

• Additional infrastructure adding 

hops (firewalls, layers of switches) 

The decentralised, fragmented nature of the FX market presents some specific challenges 

• Physical distance from trading 

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“Even a minor tweak can ripple through the latency 

landscape. This is where specialised monitoring systems earn 

their keep” 

replacements can be expensive, while 

software optimisations are often more 

cost-effective. 

well as the closeness of its vendor 

relationships. 

Distance from the participant is yet 

another crucial factor. McArthur 

notes that just 200 metres of cabling 

can introduce approximately one 

microsecond of latency in each 

direction. 


Ariel Silahian 

• Code that has not been optimised 

for speed 

• Subscribing to too much market 

data 

To determine whether these issues 

can be resolved via software or 

hardware solutions, the first step is to 

identify the type of latency (network, 

disk, application) suggests Eugene 

Markman, ION FX Chief Operating 

Officer. 

“Each requires a different approach,” 

he continues. “Network latency 

issues, for instance, may be addressed 

with software optimisations or by 

upgrading network hardware. A 

root cause analysis is important to 

determine whether the source is 

a software bug, inefficient code, 

network congestion, or hardware 

limitations.” 

From this, bottlenecks will need 

to be identified and resolved. If 

the bottleneck is due to hardware 

limitations such as a slow disk drive 

or insufficient RAM, a hardware 

upgrade may be necessary, whereas 

optimisation can resolve inefficient 

resource usage. Hardware upgrades or 

DON’T REST ON YOUR LAURELS 

Enabling ultra-low latency trading 

is an ongoing process. In addition 

to inadequate or ageing hardware 

components, slow network 

connections, poorly designed software 

architecture, and inefficient code, 

there are a host of other factors that 

can degrade operational performance. 

“Relying on third party data providers 

or trading platforms can introduce 

latency, especially if these services 

experience delays or downtime,” says 

Markman. “Inefficient data processing 

or a lack of parallel processing can also 

lead to latency, as can inefficient order 

routing algorithms or connections to 

exchanges.” 

Performing thorough risk checks and 

compliance validation can add latency 

to trading systems, which underlines 

the challenge of balancing low 

latency execution and effective risk 

management. 

“Rapidly changing market conditions 

can stress trading systems and 

lead to latency degradation, as can 

overloading the trading system with 

too many orders or data feeds,” adds 

Markman. “It is also essential to 

carefully validate software updates or 

patches before deploying them in a 

trading environment.” 

Inevitably, cost is a major 

consideration. Software fixes tend 

to be cheaper, but new hardware 

may provide a long term solution. 

The final decision is often influenced 

by whether the firm has in-house 

software or hardware expertise, as 

“The choice between store and forward 

switching and low latency cut-through 

switches is also significant,” he explains. 

“Enterprise switches (designed for 

capacity and throughput) often involve 

large buffers and store and forward 

operation, taking tens of microseconds 

to pass on packets. Conversely, purpose 

built low latency cut-through switches 

can deliver packets in hundreds of 

nanoseconds.” 

Where there is redundancy built into 

the architecture (for example, high 

availability switches, bonded NICs, or 

primary and secondary network links) 

it can be easy to forget to test the 

failover or monitor the performance of 

secondary routes. 

“A good system will have ongoing 

failover/resiliency testing and monitor 

the impact on performance,” adds 

McArthur. 

KEEP YOUR EYES ON THE PRIZE 

To establish an ultra-low latency 

framework it is crucial to have 

clear targets, controls, and an 

understanding of the trading 

platform’s scope. 

Any deviation from these parameters can 

result in performance declines, suggests 

Culiniac. “A comprehensive monitoring 

and analysis system is therefore essential, 

one that integrates both technical and 

business indicators to detect and address 

any early signs of potential degradation,” 

he adds. 

Markman refers to a number of analytical 

toolsets that can help firms monitor the 

state of their trading infrastructures: 



“Rapidly changing market conditions can stress trading 

systems and lead to latency degradation, as can overloading 

the trading system with too many orders or data feeds” 

Eugene Markman 

• Specialised market data feed 

handlers like MarketFactory enable 

efficient and low latency handling 

of market data feeds from various 

ECNs and data providers 

• In-memory databases such as 

Apache Kafka can store and process 

data with extremely low latency 

• Tools like Grafana and Kibana 

enable the creation of 

customisable, real time dashboards 

for monitoring trading system 

performance and latency metrics 

• The network monitoring 

capabilities of Crovill and Geneos 

can help to identify and address 

network latency issues 

• Cloud-based platforms such as AWS 

Lambda, Google Cloud Functions, 

and Microsoft Azure Functions 

provide scalable resources for real 

time data analytics and can be 

integrated into trading systems 

Ultra-low latency architecture is 

underpinned by a comprehensive 

suite of monitoring and analytical 

instruments which go beyond 

conventional systems. These tools 

include advanced statistical models 

capable of predicting potential 

bottlenecks through forecasting. 

“Additionally, AI enhances the system 

by grouping related incidents, allowing 

for more efficient troubleshooting 

and resolution,” says Culiniac. “Alert 

engines are fine-tuned to promptly 

notify technicians of any emerging 

issues. These sophisticated tools 

operate on top of the basic monitoring 

infrastructure, providing a multilayered 

defence against latency-related 

performance degradation.” 

The slightest disruption - network 

congestion, for example, or a snag in 

scalability - can throw a spanner in the 

works, while dependencies on external 

services such as data providers are 

another wildcard. “Even a minor 

tweak can ripple through the latency 

landscape,” says Silahian. “This is 

where specialised monitoring systems 

earn their keep.” 

THE MORE INFORMATION THE 

BETTER 

Increased market volumes demand 

analytics that can scale in real time. 

McArthur observes that the global 

expansion of cloud infrastructure 

and lower latency links has shifted 

focus from a localised race to zero 

latency to a more globally connected 

trading infrastructure. 

“A key trend is combining analytics 

from multiple sources,” he says. 

“Openness of data is crucial for 

seamless integration with other 

toolsets.” 

The current toolkit for monitoring 

ultra-low latency trading setups 

is dispersed across individual 

tools. Network analytics tools use 

AI to catch network hiccups in 

real time and suggest fixes, and 

there are applications offering 

precise timestamping to track data 

flow down to the picosecond. 

Development frameworks are also 

on the table, easing the creation and 

upkeep of ultra-low latency setups, 

although Silahian says most firms will 

build their own tools and monitoring 

systems based on their specific 

needs. 

The decision to either undertake 

to build an ultra-low latency 

infrastructure in-house or outsource 

it to a specialist provider is usually 

influenced by financial resources 

and in-house expertise according to 

Markman. 

TO DETERMINE 

WHETHER 

ISSUES CAN BE 

RESOLVED VIA 

SOFTWARE OR 

HARDWARE 

SOLUTIONS, 

THE FIRST STEP 

IS TO IDENTIFY 

THE TYPE OF 

LATENCY 




“When your business grows your infrastructure will need to 

be able to accommodate increasing trading volumes” 

Gordon McArthur 

“Most true low latency is built inhouse 

as firms like to retain the IP, 

but finding employees with the right 

skill set to be able to do this can be 

difficult as there are not many low 

latency engineers in the market,” he 

says. “Alternatively, hiring consultants 

can be very expensive. In general, the 

project would be costly, so budget will 

be a large deciding factor.” 

In-house development demands a 

team with specialised knowledge in 

network and system architecture and if 

a firm lacks this expertise, it may lean 

towards outsourcing suggests Culiniac. 

“Building and maintaining an ultralow 

latency infrastructure can be 

expensive, so firms need to consider 

whether the potential return on 

investment justifies the upfront 

and ongoing expenses,” he says. 

“Outsourcing can be faster compared 

to building in-house - a critical factor 

in markets where timing is crucial 

– and companies may choose to 

outsource if ultra-low latency trading 

platforms is not their core business, 

allowing them to focus on their 

primary market activities.” 

McArthur reckons the average timeto-money 

for an in-house build ranges 

from 18 months to three years if the 

firm can guarantee the right resources 

and location. “On top of that there 

is the CapEx for the infrastructure 

and also the cost of hosting and 

connectivity,” he adds. “People might 

question the security of outsourcing 

infrastructure rather than keeping it 

in-house, but the right infrastructure 

and provider will provide a solution 

that addresses these concerns.” 

He suggests firms question each 

provider’s scalability and security 

offering, the measures they have in 

place to reduce downtime (as well 

as how compliant they are with 

NETWORK ANALYTICS TOOLS USE 

AI TO CATCH NETWORK HICCUPS 

IN REAL TIME AND SUGGEST FIXES 

industry regulations), their proximity to 

financial hubs in order to ensure real 

time data access, and the scalability of 

their solution. 

“When your business grows your 

infrastructure will need to be able 

to accommodate increasing trading 

volumes,” adds McArthur. 

ASK THE DIFFICULT QUESTIONS 

When considering specialists for 

trading network and infrastructure, 

experience with ultra-low latency 

is vital according to Silahian, who 

cautions that although there are 

a plethora of providers, not all 

understand the intricacies of ultra-low 

latency operations. 

“Customisation is another factor 

and specifically whether they can 

tailor solutions to fit your trading 

operations,” he says. “The support 

they offer post-setup - and how they 

price their service without skimping on 

quality - are other considerations, as 

are scalability, the ability to stay on the 

right side of regulators, and security.” 

Markman agrees that ultra-low latency 

expertise is vital and that working with 

a partner that has successfully built 

and integrated similar systems will 

reduce risk. 

When deciding to partner with 

a specialist trading network and 

infrastructure provider, Culiniac also 

believes it is crucial to prioritise firms 

with a proven track record in achieving 

ultra-low latency since achieving 

such performance levels demands 

substantial R&D and time investment. 

“Additionally, the chosen provider 

should offer a comprehensive solution 

that optimises infrastructure, network, 

and software,” he concludes. “They 

should support a deep functional 

scope and have the capability 

to maintain and extend solution 

capabilities while maintaining ultralow 

latency.” 



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