eForex-May-2024

transforming global foreign exchange markets 

e-FOREX 

e-forex.net MAY 2024 

MARKET IMPACT 

Isolating the problem 

and treating it 

P2P FX 

A tough nut to crack but 

progress is being made 

FX ECNs 

Still a compelling and 

competitive proposition 

APIs 

Powering innovation 

and growth in e-FX 

DIGITAL ASSETS 

Why 2024 could be 

the watershed year 

COVER INTERVIEW 

JEFF WARD 

CEO of FXSpotStream 

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2 MAY 2024 e-FOREX

Welcome to 

e-FOREX 

transforming global foreign exchange markets 

May 2024 

Our Special Report in this edition focuses on ECN platforms 

to explore why they are still a strongly compelling proposition 

for FX market participants who have a diversity of trading 

styles. There has been consolidation in the ECN market which 

is addressing the lack of reliable and deeper FX liquidity 

that was a major concern in past years for large numbers of 

buy-side firms and these platforms have also looked to work 

closer with clients and market makers to ensure less abuse of 

liquidity. The growing demand for NDFs is also reshaping the 

landscape for ECNs in the FX market. Increased NDF trading 

activity is attracting a broader array of market makers and 

liquidity providers helping ECNs to expand the liquidity pool 

available for NDF transactions. This increased liquidity not only 

enhances price discovery but also improves execution efficiency 

for firms engaging in NDF trading. There is still work to be done 

to the ECN model, especially when it comes to market data 

distribution and order routing transparency but progress is 

being made and these platforms continue to be an attractive 

option for many trading firms, some of whom particularly value 

the anonymity they offer which can help to reduce Market 

Impact. This last point is an important topic. Market Impact 

is a concern for many FX trading firms and can be a complex 

issue which has consequences that are not fully understood 

by everyone. The fast pace of electronification in our market 

over the past few years has also resulted in it becoming more 

pronounced. So what can be done to measure Market Impact 

more effectively and what solutions can be utilised to address 

the problem? These questions and others are all discussed in our 

Trading Operations article this month. 

Finally, in the next few months we will be publishing two 

important supplements. In June our FX Settlement Risk 

Supplement will be looking at efforts being taken to build 

industry consensus about the problem of FX Settlement Risk 

and ways to address and mitigate it. Then in October our Post 

Trade FX supplement will be looking at how the industry 

can achieve greater operational efficiency by managing the 

challenges of post-trade FX operations. Both supplements, 

which will also talk about the implications for our industry of 

the move to T+1 will be available on the e-Forex website. 

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 

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David Fielder 

David.fielder@sjbmedia.net 

Digital Events 

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mail@ingridweel.com 

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

Charles Jago, Editor 

MAY 2024 e-FOREX 3

CONTENTS 

May 2024 

CONTENTS 

Vivek Shankar 

Market Impact 

Richard Estes 

Expert Opinion 

Nicholas Pratt 

FX ECNs 

Jeff Ward 

e-Forex Interview 

Michael Ayres 

Provider Profile 

Paul Golden 

Digital Currencies 

MARKET 

COMMENTARY 

10. P2P FX: A tough nut to crack 

but significant progress is being 

made 

Vivek Shankar explores the 

increasing value proposition of Peer 

to Peer matching platforms in FX 

and how they provide solutions to 

this and other challenges facing 

market participants. 

TRADING 

OPERATIONS 

16. Market Impact in FX: 

Isolating the problem and 

treating it. 

As Market Impact has become so 

important for many FX trading 

firms Vivek Shankar sets out to find 

out what steps are being taken to 

address the issues. 

E-FOREX INTERVIEW 

28. With Jeff Ward, CEO of 

FXSpotStream. 

EXPERT OPINION 

36. Making the case for 

centralised e-FX pricing for 

regional banks 

Richard Estes outlines what 

regional banks need to do 

regarding their approach to 

integrating e-FX into their core FX 

businesses to avoid some of the 

common pitfalls and mistakes. 

PROVIDER PROFILE 

39. ROSTRO Financials Group: A 

firm on a mission 

e-Forex spoke with CEO of the 

ROSTRO group, Michael Ayres, 

to discover more about the key 

products and services it offers and 

his plans for the future. 

SPECIAL REPORT 

42. FX ECNs: Looking to inspire 

the market with innovative new 

trading products and services 

Nicholas Pratt talks to leading 

industry practitioners to discover 

why the ECN platform value 

proposition still remains strong and 

compelling for many FX market 

participants. 

NETWORKS, 

HOSTING & 

CONNECTIVITY 

54. APIs: The driving force 

behind innovation and growth 

in FX trading 

Paul Golden investigates how APIs 

are exerting an increasing impact 

across the FX industry, enabling 

the creation of tailored trading 

solutions that combine off-theshelf 

and bespoke components. 

DIGITAL 

CURRENCIES 

62. Why 2024 looks set to be a 

watershed year for institutional 

engagement with Digital Assets. 

Though the landscape remains 

complex, Paul Golden discovers 

that collaborative efforts are being 

made to establish more defined 

regulations and standards to govern 

the use of Digital Assets globally. 

COMPANIES IN THIS ISSUE 

A 

AccessFintech 

Abbey Cross 

B 

Bloomberg 

BNY Mellon 

C 

Centroid Solutions 

Citi 

p6 

p8 

p19 

p6 

p61 

IFC 

DXtrade CFD 

E 

eFX Consulting 

Euronext 

F 

Factset 

Finalto 

FX HedgePool 

FXSpotStream 

p8 

p36 

p51 

p23 

p25 

p13 

p15 

I 

ION Markets 

IPC 

L 

LSEG 

O 

oneZero 

Options Technology 

p45 

OBC 

p21 

p59 

p6 

R 

Reactive Markets 

Rostro Group 

S 

Saphyre 

Saxo Bank 

SGX FX 

smartTrade Technologies 

StoneX 

Swissquote Bank 

p57 

p40 

p8 

p5 

p47 

p13 

p49 

p7 

D 

26 Degrees Global Markets p9 

H 

HSBC 

p6 

P 

PLUGIT 

IBC 

T 

360T 

p48 


FX prime 

brokerage 

Customised FX & precious metal 

liquidity and clearing solutions 

With Saxo’s technology-driven prime brokerage services partners access 

top tier bank and non-bank liquidity providers and venues. 

Our FX prime brokerage combines co-located connectivity in all three major 

liquidity centres, credit intermediation, ultra-low latency pre-trade credit risk 

controls, bespoke pricing and execution analytics. 

Saxo caters to clients of all sizes, from those who are too small to access 

the services of major investment bank prime brokers, to large clients who 

choose Saxo due to the quality of our service and offerings. 

Our partners benefit from the trust and security of a regulated and licensed 

Danish bank with a global footprint, authorised in multiple jurisdictions. 

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Contact: solutions-uk@saxomarkets.com 

+44 207 151 2100 

This material is produced for marketing purposes only. Trading in financial instruments carries 

some degree of risk, always ensure you fully understand all the risks before trading. 

Read Saxo’s full disclaimer at www.home.saxo/legal/disclaimer/saxo-disclaimer. 


HSBC releases Floating e-Liquidity Order for the FX Market 

HSBC has announced the launch 

of the HSBC FX floating e-liquidity 

order that allows institutional clients 

to place a floating order with HSBC’s 

principal liquidity via an API. 

As part of HSBC’s Global Intermediary 

Services offering, the new HSBC FX 

floating e-liquidity order capability 

enables clients to make liquidity to 

HSBC and transact electronically 

on an anonymous basis with the 

bank’s principal FX desk, across 

20-plus direct currency pairs and 

non-deliverable forwards. This allows 

clients to work orders within HSBC’s 

bid-ask spread. Vivek Sarohia, Global 

Head of FX Alternative Execution 

Vivek Sarohia 

Services, said: “Through the HSBC 

FX floating e-liquidity order, clients 

can be a liquidity maker without 

the cost challenges associated with 

technology, infrastructure and credit. 

They will have indirect access to 

HSBC’s overall internal FX inventory, 

while being able to capture spread, 

minimise their market footprint and 

mitigate the risk of adverse selection. 

It’s an alternative way for clients to 

trade FX by making liquidity to HSBC 

and offsetting risk with the bank’s 

inventory.” 

Options Technology and oneZero announce strategic partnership 

NEWS 

Options Technology has announced an 

expanded strategic partnership with 

oneZero. This is set to build upon the 

existing, proven integration between 

oneZero and Options Activ’s consolidated 

data service, streamlining the experience 

for mutual customers with bespoke API 

connectivity between Options’ multiasset 

class normalized and historical 

market data, and oneZero’s multi-asset 

class liquidity, aggregation and risk 

management solutions which facilitate 

tens of millions of trades per day. 

Leveraging Options’ normalised market 

access data model, oneZero customers 

will be able to use the Hub to distribute 

pricing and risk across a wider range of 

Danny Moore 

asset classes with an accelerated time 

to market. Danny Moore, President and 

CEO of Options, commented, “We are 

delighted to continue that mission with 

oneZero. Together, we seek to empower 

traders and financial institutions with 

the industry’s most comprehensive 

multi-asset asset class trading technology 

solution. The integration of our market 

data solutions with oneZero’s stateof-the-art 

modular risk and price 

distribution platform will be a gamechanger, 

providing unparalleled access to 

multi-asset class liquidity.” 

AccessFintech and BNY Mellon work together to address 

FX workflow challenges 

AccessFintech is working with BNY 

Mellon to bring a joint solution to the 

market for addressing FX workflow 

challenges ahead of the forthcoming 

T+1 settlement regulations. Upcoming 

T+1 settlement regulations in North 

America are posing significant 

challenges for market participants. 

BNY Mellon and AccessFintech are 

collaborating to work with clients on 

addressing these, providing clarity on 

securities trades ‘predicted to settle’ 

status. Clients based on AccessFintech’s 

network will be able to instruct BNY 

Mellon to broker FX transactions based 

on these ‘predicted to settle’ insights 

before the end of the US trading 

Jason Vitale 

day, helping to provide the necessary 

liquidity for international clients trading 

of US securities. “At BNY Mellon, 

we are laser focused on developing 

solutions that support our clients’ 

investment performance and success,” 

said Jason Vitale, Head of Global 

Markets Trading, BNY Mellon. “Our 

collaboration with AccessFintech will 

provide clients the ability to leverage 

our recently launched Universal FX 

platform to fund their T+1 settlement 

activity in an efficient and transparent 

manner.” 


LIQUIDITY 

SOLUTIONS 

THAT OPEN 

NEW 

HORIZONS 

swissquote.com/institutional 


SGX FX releases updated AI offering 

SGX FX has unveiled the latest version sifting through reports, FX traders can 

of its artificial intelligence (AI) tool, now gather tangible insights such as 

giving financial institutions improved changes in average hold times of the 

access to faster and more informed FX top 10 liquidity providers in a matter 

trading decisions. Released through its of seconds,” said Vinay Trivedi, chief 

e-FX and digital assets trading solutions operating officer at MaxxTrader. “With 

provider, MaxxTrader, the tool curates its enhanced capabilities in analysing 

FX and digital assets price and trade client data insights alongside a bank’s 

data before automatically generating internal data, the tool creates stronger 

actionable insights to a stakeholder client engagement and redefining 

– providing quicker and easier decisionmaking 

abilities. “Gone are the days identifying that a client is trading less, 

efficiency standards across FX. Whether 

of spending copious amounts of time or detecting rejected quotes on specific 

pairs, the tool liberates traders to seek 

answers to key questions.” 

Vinay Trivedi 

Saphyre collaborates with DTCC on T+1 solution 

NEWS 

Saphyre, Inc., a fintech company using 

patented technology to solve pre-trade 

activities and post-trade issues, has 

announced plans to collaborate with 

DTCC to deliver a solution to support 

clients with U.S. T+1 settlement 

requirements. Saphyre plans to link 

Saphyre’s Ready-To-Trade solution 

with data from DTCC’s ALERT to 

increase transparency, efficiency, and 

straight-through processing across the 

institutional trading industry. Ready- 

To-Trade subscribers will be able to 

query the status of critical standing 

settlement instructions (SSIs) reference 

data for all accounts, across all parties 

and across electronic systems directly 

from the Saphyre platform. The SSI 

Gabino Roche Jr 

status query can be done at the point 

of account opening or at any time 

during the trade lifecycle. 

Gabino Roche Jr., CEO & Founder 

at Saphyre said: “This collaboration 

between Saphyre and DTCC is 

another example of how Saphyre 

is leveraging pre-trade data to 

manage Ready-To-Trade capabilities 

for the front office while proactively 

streamlining post-trade settlement 

activities. These are the types of 

real-time solutions needed for 

T+1 operational readiness and 

management.” 

AbbeyCross goes live with new FX platform 

Michael Robertson 

Following its $6.5 million seed funding 

AbbeyCross has gone live with its new 

transactional FX platform and its first US 

Tier1 Bank customer. The platform has 

been built to transform FX payments 

in emerging markets for global banks, 

MSBs, NGOs and their EM payment 

providers. AbbeyCross reduces technical 

barriers to integration, addresses 

compliance and continuity risk, and 

offers much-needed price transparency 

to the fragmented and inefficient EM FX 

payment industry. 

Michael Robertson CEO and Founder 

of Abbey Cross (ex Merrill Lynch, HSBC 

and RBS head of transactional FX) 

said: “Today marks a major milestone 

in our journey to optimise and improve 

the outdated and inefficient emerging 

markets FX payments ecosystem. For this 

US Tier 1 bank client, joining the ABX 

Platform recognises its commitment to 

continuous innovation for its global client 

base. This will ultimately reduce the bank’s 

client costs, simplify their processes and 

improve their client experience.” 


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P2P FX: 

A tough nut to crack 

but significant progress 

is being made 

MARKET COMMENTARY 

Image by Shutterstock 

Vivek Shankar explores the increasing 

value proposition of Peer to Peer 

matching platforms in FX and how they 

provide solutions to this and other 

challenges facing market participants. 



The peer-to-peer (P2P) model offers 

several benefits for FX market 

participants. Originally developed as a 

way to limit information leakage, P2P 

helps traders match interests in the 

market, irrespective of the instrument 

involved. 

As electronification has grown, 

P2P can also free traders’ time by 

automating operational trades. 

However, firms have faced a 

few challenges in realising these 

advantages. Jay Moore, Cofounder 

and CEO of FX HedgePool, 

acknowledges these challenges while 

explaining why P2P makes sense for 

FX. 

“The FX market’s diverse and global 

participants create a natural pool of 

buyers and sellers, foundational for 

P2P success,” he says. “However, 

broader adoption and becoming a 

market standard require workflow 

integration and a scalable credit 

framework.” 

So how tough are these challenges to 

overcome, and how are P2P service 

providers helping firms overcome 

them? 

OVERCOMING THE FACTORS 

HOLDING BACK P2P ADOPTION 

“P2P models universally strive 

to minimise market impact, and 

information leakage by matching 

naturally offsetting flows among 

counterparties,” Moore explains. He 

says that these qualities are critical in 

swaps. 

While spot trades tend to follow 

reactionary patterns, passive hedging 

generates consistent swap volumes— 

volumes that the market likely knows 

in advance. 

“[Those] predictable flows are 

vulnerable to pre-hedging risk and 

market impact. Matching offsetting 

interests eliminates these risks, 

benefiting both our participants and 

their stakeholders,” states Moore. 

P2P’s biggest advantages hinge on 

helping firms manage predictability 

in their flows. No matter how well 

managed flows are, predictability of 

any kind creates risk. P2P eliminates 

this risk by removing any chance of 

information leakage to the broader 

market before a trade. 

Routine trades are great candidates 

for P2P execution. A trader’s greatest 

priority with them is minimising risk, 

something P2P is designed to do. For 

instance, by booking jumbo swap 

trades on a single ticket within a P2P 

community, traders can devote more 

time to strategic trades. 

And for those worried about 

manipulation, traders can compare 

P2P match rates to benchmarks, 

removing any such fear. 

While the advantages are apparent, 

firms have had to deal with a few 

challenges when implementing P2P 

models. And these challenges have 

held back widespread adoption. 

When asked what these challenges 

are, Moore begins with the likelihood 

of finding a match. “P2P success 

hinges on finding opposing interest 

within a specific timeframe, which has 

been difficult in spot trading due to 

the time-sensitive nature of the trade,” 

he says. 

However, he notes that swaps don’t 

face this challenge to the same extent 

since they are often highly scheduled 

and systematic. The challenge with 

swaps is credit, Moore says. 

“While swaps offer significant 

potential for P2P, they come with 

credit challenges. Because buy-side 

firms cannot face each other from a 

credit perspective, they need to secure 

a willing credit sponsor for trade 

booking and settlement,” he explains. 

Lastly, operational challenges have 

traditionally held back P2P adoption. 

“With FX HedgePool’s credit 

intermediation model solving for 

the credit challenges, the next step 

to success is conforming to specific 

workflow requirements to ensure 

operational scale,” Moore says. 

“Integration into existing technologies 

to support automation of operational 

workflows has proven crucial to our 

success.” 

So what does P2P have to offer 

different FX market participants? 

P2P FOR THE BUY SIDE AND 

SELL SIDE 

The good news is that evolving market 

participant trading styles make P2P an 

ideal fit for stakeholders. Take the buy 

side, for instance. 

“Smart order routing [trade 

automation] has emerged as an 

essential way for traders to scale 

their desks while continuing to 

deliver against their best execution 

requirements,” Moore explains. “Many 

of these rules-based engines, passive 

hedging included, are designed 

to automate trades with a focus 

on minimising market impact and 

information leakage.” 

These goals make P2P an ideal fit, 

given how the buy side’s goals align 

with the P2P’s aims. Moore says 

this makes P2P “a natural liquidity 

checkpoint for automated trading.” 

Matching opposing interests is 

perhaps P2P’s biggest advantage for 

the buy side. Additionally, traders can 

realise value by matching at mid-point. 

Increased algo adoption also fits into 

the advantages P2P offers. 

For instance, a trader can slice an 

order to minimise market impact by 

designating different liquidity pools to 

source from. P2P pools plug into this 



P2P FX: A tough nut to crack but significant progress is being made 

“The FX market’s diverse and global participants create a 

natural pool of buyers and sellers, foundational for P2P 

success,” 

Jay Moore 

workflow seamlessly, offering traders 

an additional source of safe liquidity. 

Furthermore, the nature of algo trades 

on the buy side makes P2P adoption 

logical. 

Algo trades tend to be operational 

and lie on the non-strategic side of 

a trader’s book. Firms need ways to 

minimise their traders’ time spent here 

while executing them with minimal 

market impact—the same goals that 

P2P helps firms achieve. 

While the benefits for the buy side are 

apparent, what does the sell side have 

to gain from P2P? “Historically, the 

sell-side has relied on internal liquidity 

and the broker market to hedge their 

principal market-making book,” Moore 

says. 

Hedging risk from the latter is 

expensive and prone to information 

leakage, unfortunately. “Offering the 

sell-side access to P2P, or more broadly, 

all-to-all liquidity pools effectively 

expands their equivalent of “internal 

liquidity”, improving the quality of 

the liquidity they can offer to their 

principal clients,” Moore explains. 

From a regulatory perspective, prehedging 

has come under scrutiny 

these past few years—with market 

voices loud enough to prompt the 

GFXC to lay down guidelines in a 

working paper. Pre-hedging conducted 

by banks brings information leakage 

into focus. 

“Put simply, building inventory in 

anticipation of an expected client order 

creates market impact and negatively 

impacts clients and their investors,” 

Moore explains. He believes P2P offers 

a solution. 

“Inserting all-to-all liquidity pools like 

FX HedgePool between internal netting 

and going to the market provides 

another way to satisfy the banks 

market and risk management needs of 

the trade while avoiding the negative 

compliance risk exposure that prehedging 

in the market creates.” 

CATERING TO MARKET NEEDS 

Moore explains that while P2P might 

change how stakeholders think 

about liquidity matching, it must still 

present a familiar face. “For any new 

technology or trading solution to 

scale, it must conform to the familiar 

workflows of the market,” he says. 

When asked what service providers 

are focusing on delivering above 

all else, Moore points to credit and 

workflows. “In the early days of P2P, 

innovative traders considered it to be 

experimental but were willing to give 

it a go in a more manual fashion to 

prove benefits,” he says.” 

As usage increases, the need for 

standardisation becomes more 

apparent and drives adoption. “For a 

buy-side trader to consider using any 

new source of liquidity with scale, 

P2P included, they must be able to 

access that liquidity through familiar 

and operationally proven technology 

that seamlessly integrates with their 

existing workflows,” Moore continues. 

“Firms like FX HedgePool have been 

able to get to this state of standardised 

“business as usual” through OMS 

integrations.” 

Standardisation also handles another 

tricky question—that of compliance 

and regulation. Integrating with 

existing workflows helps P2P providers 

address these challenges. Moore 

notes that P2P platforms are evolving 

successfully to meet regulatory needs. 

“By providing transparent and 

automated trading solutions within 

an existing trader workflow, we are 

gaining credibility and trust among 

market participants,” he says. 

Moving past workflows, we arrive 

at the credit picture. “For liquidity 

matching to work there must still 

be a settlement home for the trade 

as the participants have no direct 

counterparty relationship for the 

trade and must have a credit sponsor 

available that aligns with their panel of 

existing eligible brokers,” he says. 

“A core innovation of FX HedgePool 

when entering the P2P space was the 

separation of credit from liquidity,” 

he says. “By creating a network of 

banks with existing bilateral credit 

relationships with the network of 

buy-side participants, we’ve been 

able to allow liquidity to be sourced 

independently from where the trade is 

booked, which is the key to unlocking 

P2P.” 

“This becomes increasingly challenging 

for larger global asset managers 

who trade on behalf of hundreds, 

sometimes thousands of accounts, 

each with their own approved broker 

lists.” 

A diverse set of program credit 

sponsors eases this hurdle. 

“Counterparty flexibility allows for 


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P2P FX: A tough nut to crack but significant progress is being made 


Evolving FX market participant trading styles make P2P an ideal fit for stakeholders 

wider adoption across funds and the 

ability to deliver the benefits of P2P 

consistently across their investors in 

the name of Best Execution,” Moore 

says. 

The results have been promising. 

Market participants are recognizing 

P2P’s benefits, especially when 

speaking of pricing, market impact, 

and operational efficiencies. These 

benefits are driving increased 

adoption, Moore notes. 

“P2P platforms are constantly 

introducing innovative solutions to 

address challenges such as finding 

matching interests, addressing the 

credit and settlement complexities, 

and integration with operational 

workflows,” he says. “Increasing 

competition among P2P providers 

and traditional market participants 

will drive further innovation and 

improvements across our platforms, 

leading to enhanced services and 

offerings for all market participants.” 

THE ROAD AHEAD 

While FX market participants have 

faced barriers in implementing P2P in 

their firms, the future seems bright 

thanks to the innovations we have 

covered so far. 

Simply put, P2P makes too much 

sense for firms to avoid adopting it at 

some point. However, could changing 

regulations and markets alter this picture? 

When asked about this, Moore says, 

“Continued regulatory and market 

structure developments will shape 

the landscape for P2P trading in FX. 

Platforms that can deliver agile and 

innovative solutions will maintain a 

competitive edge.” 

He points to technology as an example 

of innovation that will sustain the P2P 

use case. “Ongoing advancements 

like improvements in matching 

engines, scalable credit, and modern 

integrated technologies will enhance 

the efficiency and effectiveness of P2P 

platforms, further driving adoption 

and usage,” he says. 

He acknowledges that shifting market 

dynamics and trading styles will affect 

P2P’s utility too. However, a platform’s 

ability to adapt is critical here too. 

“Increasing competition among P2P 

providers and traditional market 

participants will drive further 

innovation blurring the lines between 

the buy- and sell-side, leading to 

enhanced services and offerings for all 

market participants to benefit from,” 

Moore says. 

Ultimately, the trend of continuous 

innovation seems to be winning out, 

making P2P and all-to-all liquidity 

highly relevant in FX. Undoubtedly, this 

trend will continue and give market 

participants continued utility in the 

long run. 

Readers will have an opportunity to 

discover more about FX HedgePool 

in their front cover interview feature 

being published in July’s edition of 

e-Forex. 


® 

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FXSpotStream provides a multibank FX streaming and a matching service supporting 

steaming of pricing in FX Spot, Forwards, Swaps, NDF/NDS and Precious Metals Spot 

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

London and Tokyo and have the ability to communicate with all Liquidity Providing 

banks connected to the FXSpotStream Service. 


Market Impact in FX: 

Isolating the problem 

and treating it 

TRADING OPERATIONS 




Vivek Shankar 

Vivek Shankar talks to some leading 

FX providers to discover why Market 

Impact has become so important for 

many FX trading firms and what can 

be done about it. 


Market Impact in FX: Isolating the problem and treating it 

“Effective balance of managing market risk and market impact 

as a total cost of trade is the art of achieving best execution.” 

hold—both credit risk and market risk 

being contributing factors here.” 

say the least. Oleg Shevelenko, FX 

Product Manager at Bloomberg, 

believes market participants often 

misunderstand what optimal 

execution means, reducing it to a 

question of execution spreads. 

So how can firms minimise their 

market impact, and how are service 

providers helping them achieve this 

goal? Examining why achieving a 

balance between risk and market 

impact is challenging is a good place 

to begin. 


Oleg Shevelenko 

FX’s electronification has helped 

market stakeholders improve 

processes while shining a new light 

on existing problems. Specifically, 

firms are reviewing their efforts to 

reduce the impact of their trades, 

making information leakage and risk 

reduction hot topics currently. 

Ideally, optimal execution will reduce 

risk while generating almost zero 

market impact. However, achieving 

this state is proving challenging to 

“Due to its complexity and 

nuanced nature depending on [the 

participant’s] and transaction type, it 

is often misunderstood,” he says. “An 

asset manager might be trading the 

tightest price, but those executions 

could be moving markets.” 

While Paul Clarke, Head of FX Venues 

at LSEG, points out that market 

impact also affects liquidity. “Trading 

on a full-amount basis with liquidity 

providers capable of warehousing 

your risk will always minimise market 

impact but in the real world, this is 

not always possible,” he says. 

“For the largest clients, the size / 

duration of an FX position may be 

too large for a single counterparty to 

WHY MARKET IMPACT IS 

MORE PRONOUNCED OF-LATE 

When asked why the issue of 

reducing market impact has emerged 

recently, James Dewdney-Herbert, 

Associate Director, e-FX at Saxo 

Bank, says that the topic was 

always present in the background. 

“It has always been important,” he 

says. “Advancements in big data 

interpretation highlight it more 

clearly. Market impact diminishes 

a trader’s alpha and the efficacy of 

hedging, so its importance cannot be 

underestimated.” 

Bailey White, Director, Electronic 

Trading and Execution at 26 Degrees, 

explains that market impact is often 

tied to a trader’s rate of execution 

MINIMISING MARKET RISK AND REDUCING 

MARKET IMPACT ARE NOT NECESSARILY OPPOSED 

TO EACH OTHER 


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“Trading on a full-amount basis with liquidity providers 

capable of warehousing your risk will always minimise market 

impact but in the real world, this is not always possible.” 

Paul Clarke 

and their interaction with liquidity. 

“This becomes a complex issue 

because typically traders who are 

looking to enter a risk position 

based on a certain signal, or who 

are managing market risk can be 

reluctant to slow down how quickly 

they enter or exit this risk by adjusting 

their flow rate” he says. “LPs will 

widen pricing until they reach an 

equilibrium between market impact 

and spread at inception—ultimately 

leading to the trader paying a 

premium for their desire to enter or 

exit risk more quickly.” 

Firms often choose LPs with high 

internalisation rates, combining that 

with algo executions that space 

trades over time. While this approach 

ensures optimal execution, it does 

little to mitigate market impact. 

“By spreading execution over time, 

the trader will be assuming market 

risk as the price of the currency can 

change,” Shevelenko says. “Effective 

balance of managing market risk 

and market impact as a total cost 

of trade is the art of achieving best 

execution.” 

Dewdney-Herbert echoes this point 

and says, “When we work with high 

volume, high frequency strategies we 

aim to mitigate the market impact by 

transacting with liquidity providers 

who internalise rather than transfer 

the risk. The latter magnifies impact 

which is why serious liquidity users 

are choosy about who they transact 

with.” 

LSEG’s Clarke says that minimising 

market risk and reducing market 

impact are not necessarily opposed 

to each other. “If you’re trading 

with algos, absolutely your choice is 

duration, which is market risk, versus 

impact, which is speed,” he says. “I 

can trade on a full amount basis, I 

can trade with other counterparties, I 

can use different frameworks to trade 

which don’t create these offsets in 

quite the same way.” 

Clarke points out that the best 

algo providers manage the balance 

between market impact and 

execution speed by understanding 

the liquidity environment. 

Mismanagement in this regard creates 

an unwanted market impact. “I think 

electronification has helped but also 

hindered,” he says. “The biggest 

innovations in platforms recently 

are ones that promote liquidity 

aggregation for large orders without 

managing the pool of providers you 

execute with.” 

While these tools are useful, they 

give stakeholders a false sense of 

confidence. “If I have a liquidityseeking 

algo attempting to buy too 

large an amount, I’m going to have 

an enormous market impact,” Clarke 

says. “If I try and trade a TWAP for an 

amount over too short a period, I’m 

going to have an enormous market 

impact.” 

He says that these tools have 

effectively moved the problem of 

“who am I trading with?” to “how 

am I trading and being sensitive to 

the environment?” 

John Marchese, VP, Head of FX EMS 

Sales, Americas, FactSet, points to 

another factor when highlighting how 

electronification is increasing market 

impact. “Market-making technology 

has advanced quite dramatically,” he 

says. “Banks that have budgeted for 

faster pricing and trading technology 

could potentially benefit from the 

winner’s curse scenario that plays out 

on larger RFQ/RFS trades.” 

He explains that if a bank loses a bid 

in a competitive RFQ/RFS, its system 

knows that risk will likely enter the 

market very soon, presenting an 

opportunity to front-run that risk. 

“By and large, most (if not all traders) 

worry about this [reducing market 

impact] daily,” he says. “They are 

always looking for more insightful 

analytics to better understand if 

their executions are signalling the 

market and potentially reducing 

the performance of their next trade 

execution.” 

Dewdney-Herbert is forthright with 

his views. “Electronification allows 

FXLP’s to operate like agency brokers 

on steroids,” he says. “Rapid risk 

transfer, aiming to capture decipips 

between client fill and street hedge 

(not necessarily in that order) 

increases impact as the hot potato 

changes hands before meeting real 

interest.” 

26 Degrees’ White terms this 

“fragmentation” and says this is a 

consequence of electronification. 

“Improvements in technology mean 

the LPs have data to show you 

where a trader or broker has directly 


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“Market impact can be tricky to measure because it’s relative 

to liquidity consumption.” 

James Dewdney-Herbert 

caused market impact via their 

activities,” he says. “As such, pricing 

of different flow profiles has become 

more disparate as LPs increasingly 

segregate impactful flows from 

benign flows.” 

Continuing this theme, Bloomberg’s 

Shevelenko says, “Market participants 

split their large orders and execute 

across multiple venues. Advances in 

technology allowed those trading 

venues to decrease market data 

publication times, down to singledigit 

milliseconds, creating an 

environment where trading patterns 

can be easily detected.” 

MEASURING MARKET IMPACT 

While every trader understands the 

market impact consequences of their 

decisions, opacity still surrounds the 

subject. “The FX market is still early 

in its journey to create a common 

cost model to reliably calculate and 

attribute transaction costs to factors 

and evaluate their consequences on 

market impact,” Shevelenko says. 

He points to liquidity fragmentation 

across venues and dealers as a 

stumbling block. This fragmentation 

results in a lack of statistically valid 

datasets that can feed mathematical 

models. 

Another challenge looms for the 

FX market, aside from fragmented 

data. US Equities will move to T+1 

settlement, creating interesting 

questions from a market impact 

perspective. 

Clarke believes that while liquidity 

close to the date rollover will be 

challenging to source, the presence of 

high demand (should it materialise) 

will ease these concerns in the 

medium term. 

“A consequence of a lot of trading 

happening there means that there’s a 

lot more interaction between market 

participants, which means that 

liquidity begets liquidity,” he says. 

One consequence is that firms will 

look for better ways to measure 

the market impact of their orders. 

Factset’s Marchese explains that 

measuring market decay post-trade 

is one way of quantifying market 

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THE MARKET IMPACT OF 

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“Detecting information leakage is still a challenging process 

and we find that transparent communication plays an 

important role in identifying clients and venues that are not 

skew-safe.” 

Bailey White 

impact. “Our clients see a full 

view of their risk transfer price via 

Executable Streaming Price (ESP) 

connectivity which is always running 

in the background,” he says. “The 

buy-side has the option of trading on 

the ESPs or using that data to help 

analyse any market decay resulting 

from their completed algo trade or 

from a standard RFQ/RFS competitive 

execution.” 

He explains that the buy-side also 

uses arrival price comparisons as a 

means of measuring both execution 

costs as well as market impact 

implications. “Over the years we’ve 

found that buy-sides identify “arrival 

price” slightly differently, either based 

on order arrival to their execution 

trading blotter or the price of the 

currency pair in the market when 

they initiate an execution process,” 

he says. “Both can be measured 

effectively and provide total cost of 

trade and impact metrics.” 

When asked what is the best way for 

firms to measure their market impact, 

Clarke says, “I think the only way you 

measure market impact is pre and 

post-trade markout analysis. A minute 

before you issued an RFQ, what was 

the market doing? Was it neutral? Was 

it moving up? Was it moving down?” 

These observations extend to after 

issuing an RFQ. “Has the underlying 

trade trend of the market continued 

while that RFQ is out and you’re 

getting prices at the point you 

execute now, what happens?,” Clarke 

says. “Does the market then jump?” 

Given that this analysis happens on 

a per-trade basis, gathering data 

and observing impact over time is 

the best way forward. However, isn’t 

this a cumbersome process for the 

average firm? 

“The easiest way firms go about 

doing this pragmatically is to use a 

third-party provider that specialises in 

this,” Clarke says. “There are several 

TCA providers that do it. Use peer 

analytics to [analyse] whether you are 

doing better or worse than others.” 

Saxo’s Dewdney-Herbert says, “Market 

impact can be tricky to measure 

because it’s relative to liquidity 

consumption. The solution from a 

buy-side perspective is comparing 

implementation cost front-test 

outcomes versus actual TCA. If you’re 

overshooting your implementation 

cost target and your other cost 

components are all in line, then you’re 

experiencing too much impact.” 

White notes that while some thirdparty 

vendors help firms measure 

the market impact of their trades, 

this data is useless if not combined 

with effective liquidity management. 

“Prime of Primes can assist in this 

regard,” he says. 

“26 Degrees has developed a 

proprietary data analytics system 

(“Insights”) in-house that measures 

market impact across all client activity 

real-time. The data can be readily 

grouped and filtered across multiple 

facets of client activity (time, pair, 

size, client-tag, order type, market 

condition, correlations etc) which 

allows our team to communicate 

openly with clients to easily identify 

subsets of higher impact order flows, 

changes to market impact profiles, 

and trends across liquidity pools/ 

providers.” 

When asked how trading platforms 

can help firms measure market 

impact, Shevelenko says that 

bringing the issue to the forefront 

is critical. “Trading platforms need 

to provide their buy-side and sellside 

participants tools to measure 

market impact over time,” he says. 

“Highlighting the problem and 

bringing it to the forefront is a big 

step towards addressing appropriate 

behaviours.” 

White adds, “Platforms have 

continued to enhance their in-built 

analytics suites and the ease at 

which clients can access their own 

‘raw’ data. This lowers the barrier to 

entry to managing market impact. 

It more readily allows takers to 

understand the value of their flow 

& the consequences of executing in 

a manner that does induce market 

impact.” 

Benchmarks go a long way toward 

helping firms understand their 

degree of market impact. To this end, 

Shevelenko mentions that FXGO 

developed a series of best execution 

benchmarks for active traders. “The 

types of benchmarks include cost 

of trade, cost of rejects, market 

impact, reject ratios, and dealer 

responsiveness,” he says. “As the FX 

market is relationship-based, such 

common metrics allow clients and 


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“Banks that have budgeted for faster pricing and trading 

technology could potentially benefit from the winner’s curse 

scenario that plays out on larger RFQ/RFS trades.” 

John Marchese 

dealers to have a discussion around 

optimising trading behaviour and 

pricing to improve best execution.” 

Clarke notes that aside from offering 

benchmarks, “What any solution 

needs to ensure it can solve for is 

the needs of the buy side participant 

in executing at a benchmark, and 

liquidity providers in being able to fill 

their clients at that rate effectively.” 

He also explains that firms must 

examine whether a benchmark makes 

LEANING ON FX’S 

RELATIONSHIP-BASED 

STRUCTURE IS STILL 

A GOOD WAY TO 

REDUCE MARKET 

IMPACT 

sense. “If you receive an order at 

10:00 a.m. London time and your 

benchmark is to trade at the four PM 

WM fix, that could be inappropriate,” 

he says. “There’s a lot of trading there 

that could happen. Is it appropriate to 

use that?” 

NEW LIQUIDITY POOLS 

Factset’s Marchese says that new 

liquidity pools are entering the 

market with the sole purpose of 

reducing market impact. “These 

new liquidity destinations must 

have the total support of the sellside 

community or else they will 

never realise their full potential,” he 

says. “New entrants like LoopFX aim 

to solve this concern by allowing 

the buy-side to discreetly check 

their relationship liquidity to match 

at a mid-price without the market 

knowing the buy-side’s initial 

intent.” 

Shevelenko notes that combining 

algo execution with these selected 

liquidity pools goes a long way 

toward reducing market impact. 

However, he cautions against thinking 

that algos are an automatic solution 

to optimal execution, echoing Clarke’ 

comments. “Poorly designed algos or 

any automated execution methods 

with easily detectable trading patterns 

can themselves create a “signalling 

risk”, underlying the point that 

trading tools need to be carefully 

selected and evaluated,” he says. 

Clarke says that algo execution offers 

consistency by removing subjective 

inputs from an execution decision. 

That alone removes elements that 

can create market impact. “But 

the process matters more than the 

tech,” he says. “It needs coupling 

with pre and post-trade analytics 

and decision support. And once 

I’ve made a decision, what do I do? 

Which strategy do I use? Which set of 

parameters should I use? So it [algo 

execution] does help, but applying 

a scientific method to the overall 

process is important.” 

White notes that progress in this area 

has been significant. “The current 

suite of market-leading algorithms all 

focus on limiting market impact and 

information leakage,” he says. “These 

algorithms now also incorporate mid 

prediction logic to reduce adverse 

selection costs and enable an 

increased execution speed.” 

Of course, the algos aren’t a solution 

by themselves. “Managing this 

in-house efficiently requires an 

experienced and dedicated team, 

and access to an appropriate pool of 

liquidity providers who do not cause 

information leakage,” White notes. 

Meanwhile Marchese believes 

stakeholders can use algos in 

another way. “Broker-neutral 

proprietary algos can drip-feed larger 

deals into the market, so a client’s 

position isn’t being broadcast, 



which can minimise information 

leakage.” he says. Additionally, he 

adds that the buy-side can set up a 

peer-to-peer/dark pool algo wheel 

that functions as their first stop 

for sourcing liquidity. “They could 

potentially get some, most, or all, of 

their trades done at a mid-rate. Any 

residual amounts could be subject 

to price negotiation with a single 

counterpart (to keep impact low) 

or the buy-side desk could take the 

balance of their order to the street in 

a competitive RFQ/RFS.” 

TECHNOLOGY’S ROLE IN 

FURTHER REDUCING MARKET 

IMPACT 

Technology, in the form of algo 

execution, gives stakeholders a 

framework to reduce subjective 

decision-making as Clarke says. But 

there’s more to technology than just 

algos. 

Bloomberg’s Shevelenko says that 

tools like trade cost models can 

help traders measure anticipated 

market impact as a component of 

the overall trade cost for a given 

order size and execution duration. 

“Subsequently, such models will allow 

traders to evaluate their deviation of 

the expected impact and adjust their 

trading styles and liquidity selection 

accordingly,” he says. “Wide adoption 

of such tools would lead to selfcorrecting 

orderly markets.” 

Marchese offers an example solution 

Factset’s clients use currently. 

“Our clients have a toolset at their 

disposal to reduce trade size through 

the slicing of orders (manually or 

automatically),” he says. “In more 

liquid currency pairs, this could shade 

the larger order and reduce any 

signalling to the market and thus 

reduce the impact of the order.” 

Interestingly, he says that leaning on 

FX’s relationship-based structure is 

Visualisation of 26 Degrees proprietary data analytics platform ‘Insights’ 

still the best way to reduce market key. “By producing common metrics 

impact. But isn’t this a decidedly to indicate potential signalling risk for 

legacy-like approach? “Even in different execution methods, liquidity 

today’s market, “old tech/low tech” pools and providers can allow market 

is the main means to reduce market participants to make informed trading 

impact,” he responds. “Good 

decisions,” he says. 

relationships, phone orders, and chat 

sessions still rule the large notional “As the time to make trading 

trade market. Although algos have decisions is quite short due to 

held a role here, FX still is heavily increased trading volumes, it is also 

relationship-based.” 

key to make those tools available at 

the trader’s fingertips via execution 

Clarke believes that the information management systems and trading 

needed to reduce market impact is platforms.” 

already there. The question is, how 

will firms adopt it, especially ones “Information leakage is by no means 

that do not execute frequently? a challenge that has been entirely 

“Imagine a corporate that executes resolved in the market.” White 

once every year as part of a very concedes. “Detecting information 

large cash flow hedging exercise,” leakage is still a challenging process 

he says. “They may not apply the and we find that transparent 

same approach as the others and it’s communication plays an important 

probably to their disadvantage. So the role in identifying clients and venues 

question is, how do we make sure that are not skew-safe.” 

that all participants benefit from this 

information and not just this subset Ultimately, technology’s role lies in 

that is sophisticated, and do this offering greater assistance during 

regularly? It’s a case of promoting the times when firms need it. While 

adoption rather than building more it may not offer a golden solution 

widgets.” 

to reducing or eliminating market 

impact, it is helping stakeholders 

Shevelenko says using technology to design efficient processes that achieve 

produce metrics that allow firms to this goal. 

change their execution methods is 


THE E-FOREX INTERVIEW 

FXSpotStream: 

A relationship driven 

business that’s going from 

strength to strength 

Jeff Ward 


THE e-FOREX INTERVIEW 

FXSpotStream, a wholly owned subsidiary of LiquidityMatch, provides a multibank price 

streaming service to clients supporting FX spot, swaps, forwards, NDFs, NDS and Precious 

Metals spot and swaps. Banks connected to FXSpotStream serve as liquidity providers 

to clients. FXSpotStream functions as a market utility, providing the technology and 

infrastructure that supports the multibank GUI and API to send orders from clients to liquidity 

providers. Clients access a GUI or single API from co-location sites in New York, London and 

Tokyo and have the potential to communicate with all liquidity providing banks connected to 

the FXSpotStream solution. We spoke to Jeff Ward, the firms new CEO, to discover more about 

the records that the company has been breaking and his plans for the future. 

Jeff, you are 4 months into your 

new role and have seen three 

new ADV records already. What 

can you attribute this growth to? 

Growth is a word that FXSpotStream 

has become synonymous with in 

the FX market. It is no secret that 

volumes have consistently grown at 

an impressive rate, and I think that 

what we are seeing is the continued 

success of an effective and efficient 

model, a management team that 

has made important decisions in 

terms of priorities and a team that 

works extremely hard every day 

to make sure that no stone is left 

unturned. I think the fact that the 

spike in volumes coincides with 

major breakthroughs in terms of 

our new Ultra Low Latency network 

migration cannot be overlooked. 

We have received fantastic feedback 

from clients and LPs on both the 

speed and reliability of the network 

and while there are a lot of factors 

at play, this has definitely been a key 

driver for our recent success. 

understand the value of bringing 

new clients to the service and have 

a strong pipeline of prospective 

clients we are excited to work with. 

However, there is a strong emphasis 

placed on maximizing our efficiency 

for our current clients and LPs, as 

we continue to strive to offer a ‘one 

stop’ solution for our clients’ needs. 

While April proved to be a record 

month in terms of our Spot ADV, the 

growth this year has been across all 

products, most notably with NDFs 

up over 200% and Swaps up over 

70% in Q1 2024 when compared to 

Q1 2023. However, Spot constitutes 

the majority of our volume. As 

the service expands – in terms of 

products, geographical reach, client 

types and volumes – it is important 

that we never lose sight of our core 

business and continue to provide the 

class leading client service for which 

we are so well known. 

What are the key benefits 

for clients considering 

FXSpotStream? 

The sales pitch for FXSpotStream is a 

simple one, but it is very compelling. 

We are a relationship driven business 

allowing clients to connect with as 

many of the FSS LPs as they wish, 

(with the LPs agreement of course), 

via a single API or GUI connection, 

all at no cost to our market takers. 

Meanwhile, Liquidity Providers are 

given the option to pay a flat fee, 

regardless of their volume, meaning 

they are not charged on a per-million 

basis, as their volume increases their 

$ cost per million decreases. 

We see the model as extremely 

cost efficient, given that clients 

will never receive an invoice from 

FXSpotStream, but also scalable: 

clients can add products, LPs and 

In terms of products, has the 

growth been mainly spot centric? 

In 2023 we changed the way we 

report our volumes, breaking them 

out into Spot and Other, in terms of 

ADV. While Spot is, and always has 

been, a core part of our business, 

we have seen significant growth 

in other products as we continue 

to diversify our client portfolio. We 


FXSpotStream - a relationship driven business that’s going from strength to strength 

problems arise and work proactively 

tirelessly to find a solution or help 

improve the liquidity and execution 

experience on the platform. 

FX Algos have been a hot topic of 

conversation for FXSpotStream 

over the last few years. Has 

the project met the company’s 

expectations since its launch? 


Jeremy Rose is Head of Liquidity Management 

currency pairs, with FXSpotStream much of the heavy lifting has already 

handling the majority of the work. been done and the client can then 

Whether that is a client with a save a lot of time and money. 

single end user, or a setup with Additionally, the level of customer 

multiple users each needing their support provided by our team is 

own account. The benefit of letting exceptional. There is a high level 

FXSpotStream’s Onboarding Team of pride taken in our ability to 

handle the go-live process is that communicate effectively when 

We launched our support for 

FX Algos over the API in 2021, 

adding this to the GUI in 2022, 

and have been delighted with the 

reaction since its launch. As with 

our streaming service, the idea is a 

simple one, offering the entire algo 

suite of the participating FSS LPs, 

over one API or GUI connection. At 

last count, that was over 70 different 

algos, customizable by over 200 

different parameters. 

Last year, however, the team noticed 

that volumes had started to decline 

Tom San Pietro (right) is our CTO 



and set about trying to rectify the 

issue. Fast forward to today and we 

see volumes have rebounded and 

in fact, improved, as we now see a 

33% increase YoY in algo volumes. 

And that is the approach with any 

element of the service here. If we 

notice something, we act on it, 

aiming to find the best solution 

for clients, LPs and, ultimately, the 

service. 

On the topic of Liquidity 

Providers, last year you added 

two new LPs. What was the 

motivation behind this, and is 

there interest in adding more in 

the future? 

Marc Sini is SVP, Global Head of Client Services and Trade Support 

There are several factors that must 

be taken into consideration before 

adding new LPs. As a service, our 

focus is to ensure we broadly meet 

the needs of both our liquidity taker 

and Liquidity Provider communities 

to ensure a mutually beneficial 

environment. The FSS team did an 

excellent job last year in adjusting 

the pricing model to make it 

“friendlier” for new LPs to join the 

service. As a result, we were able 

to advance the talks with NatWest 

and Wells Fargo quickly and we are 

extremely excited to have them 

onboard. 

Earlier you mentioned the Ultra 

Low Latency Network migration. 

How is this project progressing 

and what results have clients seen? 

The level of customer support provided by our team is exceptional 



We are delighted with the progress 

we have made thus far with 

the migration and are close to 

finishing the market data part of 

this project leading to best-in-class 

market data latency and highly 

predictable performance. Now 

nearing completion, work has begun 

on the next stage, migrating the 

trading execution over to the new 

infrastructure. 


Antony Brocksom is SVP, Global Head of Sales and New Business 

Raju Dantuluri is Head of Product and Development 

In terms of the results: we set out 

with a goal to ensure that clients’ 

market data latency times did not 

exceed 250 microseconds under any 

market conditions when they are 

on our optimum setup. While we 

are confident that we have hit that 

milestone, there have been a number 

of other benefits that clients have 

seen, including far improved average 

times. 

Now you have had time to adjust, 

what are your plans for the 

remainder of the year? 

There are three main pillars I 

have focused on since joining the 

company. The first would be the 

community. In addition to the 

liquidity providers and clients on 

the service, we should continue to 

look for partnerships that enhance 

our service. A good example of this 

would be our recent partnership 

with FairXchange, giving our clients 

access to their award-winning 

Horizon platform. We will continue 

to look for opportunities to not only 

support our trading community, but 

to provide them with the tools they 

need to enhance their business. 

Daniel Shaw is EMEA Head of Sales and New Business 

The second would be product 

and technology. As we begin the 

migration of the trading environment 

as part of our ULL project, we really 

see the value in providing bestin-class 

technology. Alongside the 

migration project, we have made 



several enhancements to our UI and 

in-house reporting tool, FX|Insights. 

The importance of moving forward 

has never been higher in what has 

become a very competitive market. 

And finally, the third would be 

culture. In my eyes, this means 

continuing the tradition of excellent 

customer support that this service 

has been built upon. Whether that 

be the Sales teams, working to 

identify new clients, the Relationship 

Management team that handle 

our onboarding process as well as 

identifying opportunities to enhance 

clients experience on the service, 

Support who work tirelessly to 

ensure that no stone is left unturned 

should a problem arise, to our 

Product team that have helped 

us become a robust and reliable 

solution. 

Eric Zweidinger is SVP Global Head of Relationship Management 

imperative that we continue to place 

a strong emphasis on each of these 

areas. 

You mentioned the partnership 

with FairXchange – can you give 

us any more details on that? 

We understand the importance that 

analytics play in any business today. 

Being able to not only see what you are 

doing real time and the impact that has 

made, but also forecast the impact that 

potential changes could make, is vital. 

Of course we also offer our clients and 

We would not be where we are 

today without these three pillars 

working in synergy and it is 

We understand the importance that analytics play in any business today 




The FSS team did an excellent job last year in adjusting our pricing model to make it “friendlier” for new LPs to join the service 

LPs access to our internal analytics tool, 

FX|Insights, allowing them to see realtime 

data through a series of charts, 

graphs and tables that can be filtered 

using a series of metrics. 

In addition to this, we are always 

looking to enhance our MIS offering 

for our clients and LPs. We felt that 

the addition of FairXchange’s, award 

winning Horizon platform, would 

help clients make informed decisions 

regarding liquidity. It is a tremendous 

product and we are very excited 

to see how clients make use of it, 

alongside their current FXSpotStream 

offering. 

What stands out to you since 

joining FXSpotStream? 

I had heard the phrase “a small 

company with a big business 

mentality” used to describe 

FXSpotStream, and I think it rings 

true. Here at FSS, though the 

volumes have grown and the offering 

has grown, the attention to detail 

and level of pride in the work being 

done remains consistently high. 

Campbell Cleland is Executive Manager, Head of APAC Sales and New Business 

I have been very impressed by the 

culture here at FXSpotStream and 

that is, I can say with confidence, 

a huge reason why this business 

continues to grow. 



THE ATTENTION TO 

DETAIL AND LEVEL 

OF PRIDE IN THE 

WORK BEING DONE 

AT FXSPOTSTREAM 

REMAINS 

CONSISTENTLY HIGH 


Making the case for 

centralised e-FX pricing for 

regional banks 

By Richard Estes, Founder and Principal, eFX Consulting 

entering one quote request at a time 

manually via EchoFX, Bank of New 

York’s investment manager clients 

could instead upload dozens and 

dozens of FX trade requirements, on 

behalf of various investment funds, 

and group them by currency pair and 

tenor before submitting them for 


Richard Estes 

Twenty-five years ago this summer, 

I witnessed the first client trade 

executed from iFX Manager, an 

Internet-based FX trading platform 

for investment managers I created 

for one of my former employers, the 

Bank of New York. iFX Manager was 

built in concert with a U.K. FinTech 

firm named AVT Technologies, and 

connected to AVT’s initial pricing 

engine known as EchoFX. Designed 

in the late 1990s at the dawn of a 

transformational era for the foreign 

exchange market, EchoFX was an 

application that provided dealable or 

indicative spot, outright, and swap 

prices to a bank’s clients, enabling 

them to request a quote by a mere 

click of a mouse. The quote request 

was then transmitted to the bank 

electronically, where it was either 

auto-executed or intercepted by a 

bank FX salesperson or trader to 

update the price if necessary. 

The added value of iFX Manager for 

clients, as a separate application from 

EchoFX, was providing them with 

significant automation and straightthrough 

processing. Instead of 

quotes. To enable this means of highvolume 

trading, EchoFX was modified 

to allow iFX Manager, or any other 

application, to connect to it via API. 

This modification of EchoFX, which 

later became the basis for Reuters 

Electronic Trading (RET), one of the 

FX industry’s most popular bank 

pricing engines, was prescient in 

allowing other trading applications 

to connect to it in a hub-and-spoke 

manner. Nearly two years later, in 

May 2001, I witnessed our first 

corporate client quote request from 

the newly launched multi-dealer 

platform FXall appear on the screen 

of EchoFX alongside quote requests 

from investment managers using 

iFX Manager. A few years after that, 

quote requests from some Europeanbased 

clients using multi-dealer 

platform 360T also appeared on the 

same screen. 

While the concept of providing 

a means for a bank’s clients to 

request prices and execute trades 

electronically – let alone over the 

Internet - was clearly revolutionary 



during this period, what was indeed 

remarkable for someone working in 

an FX trading room at that time was 

having the quote request information 

displayed on a computer screen – 

the client’s name, currency pair, the 

amount, the direction, and the value 

date. Previously, this information was 

relayed via phone, and not necessarily 

shared with everyone in the FX 

trading room. 

During the 2000s, more and more of 

our clients were priced electronically 

as they gradually moved from the 

phone to the computer to trade, 

whether on a multi-dealer platform or 

our own single-bank platform. Even 

more impactful for our FX business, 

however, was the newfound ability 

to price and execute FX trades from 

indirect sources, such as those related 

to custody, brokerage, cross-border 

payments, and outsourced currency 

hedging. This ability to price all direct 

and indirect quote requests through a 

centralised pricing engine effectively 

created a view of much of our FX 

trading desk’s activity over the course 

of the day. Even more importantly, 

our evolving e-FX infrastructure 

enabled us to capture all of this FX 

risk from client trading activity at 

the moment of execution, and then 

feed it to a centralised book where 

the risk could either be offset with 

existing positions or else covered in 

the market. 

THE STATE OF E-FX IN 2024 

Fast forward to today, the 

implementation and management of 

a robust e-FX infrastructure is now 

the way the top tier banks operate 

their FX business. They provide their 

clients with executable streaming 

prices across dozens of currency pairs, 

co-locate their low-latency pricing 

engines at industry data centers 

in New York, London, Tokyo, and 

Singapore, and manage sophisticated 

trading algorithms that can offload 

The process of pricing relationship trading using an FX trading system while pricing competitive trading using an 

e-FX pricing engine is not ideal 

non-internalized risk with any number 

of liquidity providers in a matter of 

milliseconds. 

However, many banks do not 

operate their FX business in this 

manner, namely the regional banks 

that were the subject of an article 

I wrote nearly four years ago for 

this magazine. These banks, which 

largely service retail, business, and 

commercial clients, and occasionally 

some corporate, investor, and/or 

wealth management clients, tend to 

have more transactional-related FX 

(e.g., foreign currency wire and ACH 

payments) than risk managementrelated 

FX (e.g., forwards, swaps, 

NDFs). 

This transactional FX activity, which 

is part of what I call “relationship 

trading,” has historically been priced 

by regional banks using an indicative 

FX rate feed within an FX trading 

system from providers like Finastra, 

ION Group, CGI, Calypso, Broadridge, 

and Finzly. These FX trading systems 

are primarily designed to process, 

confirm, and settle trades, and 

provide P&L reporting to enterprise 

accounting systems. However, when 

a few of a bank’s clients desire to 

trade risk management-related FX on 

a competitive basis using an industry 

multi-dealer platform such as FXall, 

Bloomberg, 360T, or FX Connect, 

an FX trading system’s rudimentary 

pricing capabiity cannot support 

this. Instead, the bank is often driven 

to invest in an e-FX pricing engine 

and connect it to the multi-dealer 

platform to support these clients. 

BALANCING RELATIONSHIP 

TRADING WITH COMPETITIVE 

TRADING – THE NEED FOR 

CENTRALISED E-FX PRICING 

The resulting bifurcated process of 

pricing relationship trading – the 

bulk of a regional’s bank’s FX activity 

- using an FX trading system while 

pricing occasional competitive trading 

using an e-FX pricing engine is not 

ideal. For one, the e-FX pricing engine 

is often deployed on an exception 

basis by the trading desk and viewed 

as simply a means of providing prices 

in competition to a few clients on one 

or two multi-dealer platforms, with 

few resulting won trades. As a result, 

it may be operated on a standalone 

basis, and not used in tandem with 

other e-FX infrastructure components, 

such as risk management or liquidity 

aggregation from interbank sources, 

due to the additional costs involved. 

For another, this process creates a 

need to manage pricing and risk 

positions in two different places, not 

ideal for a bank that likely has limited 

FX trading personnel. 

The solution, therefore, is if a bank 

is required to implement an e-FX 

pricing engine to support some 


Making the case for centralised e-FX pricing for regional banks 

• All completed FX trades can be fed through a single API 

designed for trade output, available from a provider like 

Refinitiv or OSTTRA, to the FX trading system for trade 

processing, confirmation, and settlement, providing a 

singular approach to straight-through processing. 


clients trading via a multi-dealer platform, then the e-FX 

pricing engine should be the center of all client FX trading 

activity, such as quote requests originating from a bank’s 

single bank platform, its sales desk, or other internal FX 

activity that may be generated from the bank’s Treasury 

Management, Trade Finance, Custody, Brokerage, or Wealth 

Management businesses. 

Doing so provides a bank with number of benefits: 

• With additional investment, an e-FX pricing engine can be 

integrated with other e-FX components, such as a liquidity 

aggregator to source the best prices available from 

liquidity providers, algorithmic tools for risk management 

to offload undesired positions systematically to liquidity 

providers, forwards and swap pricing data to support 

a bank’s own market-making in these products, and 

analytics to help traders optimize their price distribution 

while improving profitability with clients. 

• All client risk from both multi-dealer platforms and 

internal bank sources can be consolidated in a single 

trading risk book, giving the bank some opportunity to 

internalize client flows. 

While there has been some change in e-FX pricing engine 

providers since my initial article in 2020, the primary 

ones used by many regional banks these days include 

those from Refinitiv (Electronic Trading), 360T (Automated 

Dealing Services + Market Maker Cockpit), smartTrade 

(Liquidity FX), ION Group (Aphelion e-FX), oneZero 

(Liquidity Provider Hub), and Integral. These providers 

recognize the importance of a bank having a complete 

ecosystem of components to operate centralised e-FX 

pricing. 

UTILISING AN E-FX PRICING ENGINE FOR 

MULTIPLE PRICING METHODS 

One misconception is that an e-FX pricing engine can only 

generate real-time FX prices that are constantly updating. 

While this is expected quoting behavior for the multidealer 

platforms, and perhaps for bank sources like a 

single bank platform, it may not be suitable for a bank’s 

other FX activity that may require static rates over the 

course of a few hours or an entire day, or may need to be 

priced using third-party rates such as those provided by 

the WM/Refinitiv fixing service. 

In fact, many e-FX pricing engines, using a separate 

rate area or branch, can be configured to keep such 

static or fixing rates “live” for minutes or even hours 

so that they do not go stale and become ineligible for 

automated quoting. Employing multiple rate areas or 

branches within an e-FX pricing engine – such as one for 

real-time competitive trading pricing, one for real-time 

relationship trading pricing, and one for static pricing 

of FX transactions from internal businesses or systems – 

can provide a bank with ample flexibility to manage all 

electronic pricing in a centralised manner. 

E-FX: THE WAY FORWARD FOR REGIONAL 

BANKS 

In summary, regional banks that have not properly 

invested in an e-FX infrastructure and integrated in into 

all of their external and internal client FX trade sources 

need to realize that e-FX is not simply for the top end 

of the market, namely Tier 1 banks, large corporates, 

and large investment managers. Rather, implementing a 

proper e-FX infrastructure and using it to price all of a 

bank’s FX trading activity is the way to run a bank’s FX 

business in 2024, regardless of size. 


ROSTRO Financials Group: 

A firm on a mission 

ROSTRO Group (ROSTRO) is a diversified and full-service fintech and financial services group 

focused on financial markets and prime brokerage that is set on a mission to effect change 

in financial inclusion at a global level. e-Forex spoke with Group CEO of the fast-growing 

group, Michael Ayres, to discover more about the essence of its business, the key products and 

services it offers and the ambitions for its future. 

Michael Ayres 

Michael, please tell us a little 

about when ROSTRO commenced 

operations and the different 

entities within it. 

ROSTRO was founded in 2021. It was 

created as a new holding company that 

would cover every single type of client 

in the sector, catering to all financial 

audiences and servicing all kinds of 

trading and investment requirements. 

We wanted to take a forward-thinking 

approach to investment and the 

provision of broader financial services. 

When Roger Hambury and I first 

sat down to draw up the details of 

Rostro, we knew one thing for sure: 

we wanted to create an all-inclusive 

ecosystem that would service every 

level of market participant. So, we set 

off to create a group that was designed 

to create sustainable end-to-end 

solutions. We imagined a group whose 

collective proposition would enable us 

to deliver an unrivalled product range. 

By taking this inclusive approach, 

we gain valuable diversification that 

ultimately insulates the business from 

short term market uncertainty. 

Today, this is something we deliver 

through our Scope Markets retail 

proposition, as well as with our 

Scope Prime, Direkt Prime and Direkt 

Prime Liquidity institutional divisions. 

We see ourselves as a leader when 

it comes to inclusive accessibility in 

financial markets. As such, our journey 

of evolution will see us develop and 

deliver a wider range of financial 

products and services in the future. 

What range of products and 

services does ROSTRO offer? 

From Rostro, our services currently 

fall into four categories – brokerage, 

OTC market making, DMA execution 

services, and custody services. 

Through our institutional brands, 

we are able to cater to a wide and 

diverse range of institutional clients 

from broker-dealers to hedge funds 

and commercial institutions. We don’t 

just provide multi-asset liquidity, 

technology and risk management 

solutions – through our ecosystem 

of financial expertise, we are able to 

tailor every aspect of our propositions 

to build bespoke solutions clients need 

to scale their own businesses for better 

performance and revenue potential. 

Scope Markets, Rostro’s global retail 

brokerage arm, is our diversified, multiasset 

financial services brand that offers 

trading and investment services. Scope 

Markets is uniquely positioned to benefit 

from the Rostro ecosystem. We provide 

access to over 40,000 markets and, 

depending on the entity, enable trading 

via a suite of powerful platforms such as 

MT4, MT5, CQG, IRESS, and Bloomberg. 

As a business, we understand the 

benefits of taking the best technology 

and constructing as much of the 

ecosystem we need to support our 

operations. We believe our responsibility 

to our continuously growing client base is 

to target the emerging markets which we 

believe are currently underserved by the 

wider financial community. 

We leverage our ecosystem to provide the 

products and services our clients need. 

This enhances our focus on becoming a 

one-stop solution, allowing us to cater for 

all – ensuring that we continue to grow a 

sustainable business that can weather all 

market conditions. 

What types of clients is ROSTRO 

working with? 

As a business, we pride ourselves on 

offering solutions for every level of market 

participant in the ever-evolving landscape 



ROSTRO Financials Group: A firm on a mission 

deep sector knowledge, whilst we also 

benefit from his proven entrepreneurial 

spirit in the sector. 


We are hugely grateful to have the support of Roger Hambury, the company’s owner and founder 

of financial services. As a result, we’re You have put together an executive 

working with regional banks, brokerdealers, 

hedge funds, family offices, asset professionals. What advantages has 

team of very experienced industry 

managers, HNWIs and individual retail that given you? 

customers to ensure they have access 

to the tools they need, whether that’s We are hugely grateful to have the 

to meet their own business needs or to support of Roger Hambury, the 

support their own network of underlying company’s owner and founder. He has 

clients. This is all underpinned by our been a leading figure in the FX and 

model of inclusivity, which is designed Derivatives space for the last three 

to ensure we can cater to a continually decades, with the result of delivering 

broadening client base. 

the big-picture view supported by 

Our Group COO, Jason Rewse-Davies, 

also has more than three decades of 

experience from a “TMT” (technology, 

media and telecoms) blend of sectors, 

which is hugely helpful when it comes 

to having a multi-brand group that 

reaches beyond financial services. We 

know that technology is at the heart 

of everything we do and harnessing its 

potential will be critical when it comes 

to delivering the ROSTRO Group of 

the future – one that actively looks 

to extend its reach by focusing on 

accessibility and inclusivity, in turn 

tapping into far broader markets. 

And then my own experience of 

operations, risk and indeed running 

a number of globally regulated 

brokerages means I can provide firsthand 

knowledge when it comes to 

understanding how the core processes 

of the group work on a daily basis. 

The three of us are supported by a 

fantastic management team with 

decades of experience of their own in 

various areas of the financial services 

business. We have a team of experts, 

having built start-ups, led multinational 

groups, and spearheaded 

business units for a variety of globally 

recognised market leaders. We now 

bring all of this together as Rostro. 

How have you gone about it trying 

to differentiate ROSTRO from other 

firms operating in the market? 

Scope Markets our diversified, multi-asset financial services brand, offers trading and investment services 

With a passion for innovation in 

finance, Rostro’s mission from the 

start has been to remove friction 

and distance between the individual 

investor and the financial services 

ecosystem. We enable every level of 

investor via market access, product 

range and user experience to exercise 

choice and take action to make, invest 

and manage money within financial 

markets. We have put agility at the 



GCC, Africa, and through the global 

operations we have implemented. 

Local licensing, funding solutions and 

customer service is the key to our plans. 

What’s your long-term vision for 

ROSTRO and how ambitious are 

your plans for the future? 

We hold an ethical responsibility to the community and environment where our business is based 

heart of our operating structure, to enhance the experience of customers 

looking to leverage both our market on both the retail and institutional 

knowledge and the regulatory 

level. We are licensed in 6 jurisdictions, 

footprints of our subsidiary companies. with more to come, as we put the 

We’re not afraid to push the envelope combination of regulation, technology 

and as a result, look at opportunities and company culture together. 

that some other participants may be 

quick to shy away from. 

Where and in what ways will you 

be focusing your efforts this year to 

What’s been your strategy so grow the business further? 

far for expanding your footprint 

within both the financial services As with many in the financial services 

and technology sectors? 

sector, we recognise the fast growth 

potential that is currently being seen 

Within financial services, we have in the Middle East, most notably 

been growing primarily through across the GCC states as they 

business development. We have now liberalise access to financial markets. 

broadened our focus to include product Our overall approach is to ensure we 

development, having recently hired a adopt a global and holistic view of 

highly experienced industry veteran as market opportunity rather than simply 

Group CTO, Ben Swann, who is leading following the topical trend of today. 

our path in building client led solutions We have plans to expand in SEA, 

We want Rostro to be a gateway for 

financial inclusion. We know that 

there are a lot of underserved markets 

globally when it comes to financial 

services. It’s perhaps too easy to be 

complacent about this when you’re 

in London, Dubai or Sydney and can 

easily find solutions for most financial 

challenges. But once you look beyond 

this, the gaps in financial services 

provisions can be significant. This is 

what we’re looking to help address 

across the globe. 

Inclusivity is what Rostro’s purpose is 

built on. We want to house the world’s 

most all-inclusive ecosystem of financial 

services. What we are seeing in the 

wider finance industry is a convergence 

of financial sectors and functions with 

consumers expecting these services 

more and more to be fused into multifunctional 

propositions. 

The Rostro B2B2C ecosystem is not 

just for retail traders, it’s not just for 

institutional traders, it’s not just for 

hedge funds, or money managers, 

but it’s totally inclusive of everyone 

who wants to participate in financial 

markets. The model of inclusivity and 

catering to a continually broadening 

client base future-proofs and futurefits 

the businesses under the Rostro 

umbrella. 

The model of inclusivity and catering to a continually broadening client base future-proofs and future-fits the 

businesses under the Rostro umbrella. 

We are invested in our promise of 

improving the ways people relate to 

their money and Rostro will continue 

to grow and expand to include more 

functions of the financial services 

sphere that deliver value to every level 

of client. 




FX ECNs: 

Inspiring the market with 

innovative new trading products 

and services 

Nicholas Pratt examines what leading ECN providers are doing to ensure 

their offerings remain compelling and competitive. 



Nicholas Pratt 

Increased market volatility and the 

adoption of new, algorithmicallydriven, 

multi-asset trading strategies 

have both served to make the 

ECN model more attractive to FX 

market participants. The flexibility 

and less rigid protocols suit a more 

diverse client base which in turn has 

improved the depth of liquidity. In 

addition, ECNs have worked hard to 

improve the reliability of the liquidity 

through the use of analytics and the 

introduction of trading rules. 

But what are the ECN providers doing to 

ensure they remain competitive as new 

entrants emerge? How are they investing 

in their technology platforms? What more 

use can be made of data and how can 

the liquidity be made even more reliable? 

RICH ECOSYSTEM 

According to Matthew Whitaker, director 

of product for MarketFactory, part of 

the ION Markets (FX) product suite, 

the ECN value proposition remains 

strong because of a rich ecosystem 


FX ECNs: Inspiring the market with innovative new trading products and services 

“The move away from last-look on ECNs has helped address 

the problem of liquidity mirages, while there have also been 

tighter spreads for flow that matches both maker and taker 

trading models.” 

mechanisms offered by ECNs has 

expanded. For example, Refinitiv’s 

spot matching service allows for 

randomisation of both passive and 

aggressive orders to promote fairness 

between participants and minimise 

the incentive for firms to invest in low 

latency infrastructure to improve their 

trading outcomes. 

The arrival of new trading styles such 

as algorithmic trading and its focus 

on minimising market impact and 

providing trading analytics has played 

into the strengths of FX ECNs, says 

Whitaker “Algo offerings typically 

from Tier 1 banks direct bilateral client 

orders to access ECN liquidity that 

would not otherwise be the case. 

Algos also make use of the advanced 

order types available on ECNs, while 

analytics tools such as TCA are used to 

review the performance of the algos. 

There is a broader and more balanced 

client base with ECNs.” 


Matthew Whitaker 

where workflow supports a diversity of 

trading styles – from bilateral trading 

to mid-point matching. It also supports 

the regional and OTC nature of the FX 

business as do the other properties of 

the ECN model – the ability to access 

multiple counterparties through a single 

integration; curated liquidity through 

a liquidity manager to improve fill 

rates; anonymous trading to prevent 

information sharing; access to rich 

streaming orderbook market data. 

In recent years, the range of pricing 

models and order management 

EBS has replaced three separate 

matching engines in London, New York 

and Tokyo with a single location for 

trading any particular FX instrument. 

It has also recently introduced 

conditional price increments which it 

claims enhances liquidity and market 

data quality. 

In addition, there has been an industry 

trend moving offerings towards 

finer grained time-slicing and/or 

unconflated market data. There is 

also the increasing popularity of algo 

strategies, native pegs and iceberg 

orders, and multidealer platforms 

that offer both straight pass-through/ 

bilateral and aggregated/basket 

trading models. 

There has also been a wave of 

consolidation in the ECN market 

which is addressing the lack of 

reliable and deeper FX liquidity that 

was a major concern in past years 

for large numbers of buy-side firms, 

says Whitaker. For example, CME’s 

acquisition of EBS has allowed the 

planned launch of the new FX Spot+ 

platform to connect OTC and futures 

liquidity. Meanwhile, LSEG acquired 

both Refinitiv and FXAll while 

Deutsche Börse acquired 360T, so 

further similar initiatives are expected. 

ECNs have also looked to work closer 

with clients and market makers to 

ensure less abuse of liquidity, says 

Whitaker. For example, there are 

various dark pools such as BGC MidFX 

as well as the aforementioned spot 

matching randomization offered 

by the likes of Refinitiv/LSEG. “The 

move away from last-look on ECNs 

has helped address the problem of 

liquidity mirages, while there has also 

been tighter spreads for flow that 

matches both maker and taker trading 

models,” says Whitaker. 

In some ways, the ECN model resembles a Swiss Army Knife 

The growing demand for NDFs is 

also impacting ECNs, says Whitaker. 

For example, SGX CurrencyNode is 

working to establish an Asian NDF ECN 

in SG1, the Singapore data centre, 

and the LSEG has also introduced a 




“As an end consumer, you need trust. That explains the 

differentiation in success of the different ECNs. If you are a 

trusted partner to your clients, that will help.” 

to manage the various aspects, from 

market data distribution to liquidity 

management. 


Paul Clarke 

new NDF matching platform there. 

In addition, USD/BRL pairs are more 

widely available now based on B3/BMF 

futures. “Electronification is a result 

of increased volumes and deeper 

available liquidity resulting in the need 

for further automation,” says Whitaker. 

To date, the FX Swaps market has 

been largely excluded from this 

process. However ECNs such as 

360T’s SUN swap-matching platform 

offer the automation, efficiency 

and transparency needed, and it is 

Jill Sigelbaum 

expected that technology change will 

happen very quickly here. 

There is still work to be done to the 

ECN model, especially when it comes 

to market data distribution and order 

routing transparency. Whitaker would 

like to see the broad adoption of of 

microsecond market data timestamps 

across regions; consolidated market 

data platform for multiple ECNs/ 

LPs; and smarter credit management 

models - given the increasing 

participation rates on these platforms. 

CUSTOMISABLE LIQUIDITY 

According to Paul Clarke, Head 

of FX Venues at LSEG, the ECN 

proposition is compelling because 

no other paradigm offers the level 

of flexibility that ECNs provide. 

“Compared to Primary Markets that 

have constraints to promote price and 

trade transparency, with ECNs you 

can provide firm or last look liquidity, 

you can use hidden order types to 

reduce signalling and you can choose 

counterparties,” he says. 

“The ECN model gives every 

participant the customisable liquidity 

they want, with the ability to execute 

in different ways,” adds Jill Sigelbaum, 

head of strategic development & 

partnerships, FX, at LSEG. 

In some ways, the ECN model 

resembles a Swiss Army Knife. But 

this means that users have to know 

which component to use for different 

trades and different strategies and 

objectives, placing more onus on them 

“The ECN model gives every participant the customisable 

liquidity they want, with the ability to execute in different 

ways,” 

“There have been problems with ECNs 

and liquidity management in the past 

because of behavioural factors such as 

asymmetric last look. ECNs have had 

the ability to combine the best LPs with 

the worst. What has changed is the level 

of disclosure and this allows clients the 

ability to level the playing field and ECNs 

to become a cleaner place in which to 

transact,” says Clarke. 

The addition of full amount streams 

has also allowed participants to access 

deeper pools of liquidity. However, 

the ECN model puts an element of 

responsibility on participants to manage 

their underlying counterparties and their 

liquidity. “For market data distribution 

and transparency, it is really down to the 

end participant to manage that,” says 

Clarke. “The benefit of primary market 

pricing is the transparency but you don’t 

get the same with an ECN. Is it a firm 

order or a last look? So there is more 

onus on the consumer to curate that.” 

However, this does not mean that ECNs 

cannot help. For example, if the client 

wants to see skewed interest from LPs, 

they will be reliant on the ECN to help 

broker that. “As an end consumer, you 

need trust,” says Clarke. “This is a key 

factor in the different success rates of 

the ECNs. As an end consumer, you 

need to trust the ECN and your liquidity 

managers as you will be reliant on 

them to help curate your liquidity. That 

explains the differentiation in success of 

the different ECNs. If you are a trusted 

partner to your clients, volume will 

follow.” 

To this end, FXAll provides a ‘white 

glove’ service to aid with liquidity 

management. “We provide feedback 

on who you’re interacting with and 

ensuring appropriate behaviour 

in terms of liquidity provision and 


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As one of the first ECNs to require Market Makers adhere to 

the code, an ethical ecosystem is central to our philosophy.” 

Vidura Seneviratne 

liquidity taking,” says Clarke. 

“As we develop the ECN space, we 

see each client sector has its own 

objectives,” adds Sigelbaum. “For 

example, hedge funds have varying 

needs in the execution space, and 

asset managers need streamlined 

workflow. So we provide all of these 

services, allowing our clients to 

innovate. Analytics are also becoming 

much more important for pre-trade 

analytics and deciding the best way to 

execute – via algos or RFQ.” 

In recent years there has been an 

emergence of new ECNs, some more 

focused on specific client segments 

but the challenge they face in 

adopting a more customised approach 

to liquidity is ensuring enough 

continuous trading activity to provide 

good and consistent liquidity. 

This has led to some partnerships that 

combine the scale of well-established 

large ECNs with the more customised 

newcomers. “Network scale is superimportant 

and the new ECNs struggle 

to get the same level of adoption 

because of that,” says Clarke. “They 

have interesting solutions but they 

come to us because they need the 

distribution ability and a regulated 

entity with deep liquidity.” 

It is also more preferable for traders 

to have a single front-end that can 

link to different venues as opposed 

to managing a multitude of screens. 

“It gives every participant the custom 

execution and liquidity that they want 

with the ability to trade in different 

ways. The aggregated compliance and 

reporting aspects can also give some 

comfort” says Clarke. 

“While the trends of the last 10 

years have been around customising 

liquidity and streamlining workflow, 

there is now a focus on automation 

around the rest of FX infrastructure. 

One example is client onboarding, 

which can be a real inhibitor to 

trading, as it can take weeks to 

months for a new account to be set 

up to trade” says Sigelbaum. “At the 

other end of the transaction lifecycle, 

settlement has become more of a 

concern because of the ramifications 

of T+1 on the FX market. Do we 

need atomic settlement? Do we need 

pre-trade funding? What will be the 

impact on credit? A lot of that is still 

evolving.” 

TRANSPARENCY AND 

ANONYMITY 

There are a number of reasons why 

ECNs remain a compelling proposition, 

says Vidura Seneviratne, head of 

spot strategy at 360T. “They provide 

access to a broad array of FX liquidity, 

can provide both transparency and 

anonymity to help reduce market 

impact and allow firms to build 

customised liquidity pools so they are 

quick to market. And costly highquality 

connectivity has already been 

done for the user. Another key selling 

point is that, with the right credit 

model in place, ECNs enable firms to 

trade with counterparties that they 

don’t have direct credit lines with. This 

increases the potential for improved 

FX execution and is a particularly 

powerful proposition for a platform 

like 360TGTX, which has a highly 

diversified and global user base.” 

ECNs are also seeing increased demand by LPs for higher quality data around their pricing competitiveness 

The depth and reliability of liquidity 

on ECNs has typically been considered 

as a major buy-side concern in recent 

years but Seneviratne disagrees. “We 

would argue that Spot FX liquidity has 

not been a major concern for buy-side 

firms, especially in the more liquid 

currency pairs, Certainly, at 360TGTX 

liquidity has never been an issue due 

to our robust network of liquidity 

providers, our global reach and ability 

to partner with local market making 


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on behalf of StoneX Markets, LLC (“SXM”), a member of the National Futures Association ("NFA") and provisionally registered with the U.S. Commodity Futures Trading Commission ("CFTC") as a swap dealer. SXM's 

products are designed only for individuals or firms who qualify under CFTC rules as an 'Eligible Contract Participant' ("ECP") and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member 

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futures and options are made on behalf of the FCM Division of SFI. 

© 2023 StoneX Group Inc. All Rights Reserved. 




“As ECNs warehouse a tremendous amount of data, we 

continue to see strong demand for more unique and derived 

data sources as clients want to diversify from traditional 

sources for modelling and price construction.” 

Jayesh Patel 

experts and the deep, long-lasting 

relationships we have established with 

major liquidity providers who provide 

highly competitive pricing on the 

platform,” says Seneviratne. 

“What is more significant for 

buy-side firms is the flexibility 

that ECNs offer with regards to 

accessing and interacting with FX 

liquidity. We support disclosed, 

anonymous, streaming and RFS, 

as well as support Algo businesses 

at both the execution and hosting 

level. However, we are continually 

innovating to enhance 360TGTX and 

with our new HyperSonic technology 

have been able to blend disclosed 

and undisclosed liquidity pools to 

enhance matching opportunities 

across our venue. We also work 

with FX market participants to help 

them build, optimise and maintain 

bespoke pools of liquidity and have 

integrated these with advanced 

matching technology to help 

improve order fulfilment. Finally, 

ensuring all liquidity providers on 

anonymous platform are FX Global 

Code compliant also fosters a more 

transparent and reliable trading 

environment,” says Seneviratne. 

There is still work to be done though, 

says Seneviratne. “It’s essential for 

ECN platforms to continue offering 

FX market participants advanced data 

analytics and reporting tools. Providing 

detailed insights into trading activities 

and market dynamics helps to 

improve transparency, provide better 

insights into order execution paths 

and enables traders to make more 

informed decisions.” 

360T also prides itself on the efforts 

made to avoid liquidity abuse and 

to create custom liquidity pools to 

ensure positive yield for the LP and 

optimal fill rates for clients. “As one 

of the first ECNs to require Market 

Makers adhere to the code, an 

ethical ecosystem is central to our 

philosophy. 360TGTX has developed 

customised liquidity pools that cater 

to the specific needs of various market 

participants, ensuring optimal trading 

conditions and reducing the likelihood 

of liquidity abuse. These pools are 

managed by a dedicated liquidity team 

who continuously work to align the 

pools with client needs, enhancing 

the overall trading experience,” says 

Seneviratne. 

FX remains a highly competitive 

marketplace and it is therefore 

important for firms to make 

continuous enhancements to their 

technology offerings, says Seneviratne. 

“In recent years we have invested 

heavily in implementing high 

performant technology for 360TGTX 

to ensure that we can offer ultra 

low-latency trading and market data 

distribution. While we think we are 

now close to being the fastest, we are 

certainly the most deterministic, which 

is incredibly important for ensuring 

the consistent execution of trading 

strategies.” 

VOLATILITY AND UNCERTAINTY 

For Jayesh Patel, head of product 

for Euronext FX, the flexibility of 

the ECN model has been the main 

driver of secondary growth over 

the last five years. This flexibility 

can be seen in terms of execution 

styles, price discovery and managing 

counterparties. Added to this has 

been the development of client-driven 

liquidity pools and efforts to please 

both market makers and liquidity 

takers. 

“Makers can leverage ECNs with 

strong governance around skew 

safety in order to trade with skew safe 

takers to exist their risk in an efficient 

manner that is additive to their core 

franchise business,” says Patel. “For 

takers, the increase in algo-driven 

execution fits well into the anonymous 

ECN world, where bespoke liquidity 

pools can be created to match the 

client’s requirements.” 

Another factor has been the rise in 

volatility, says Patel. “2024 thus far 

has been marked by increased levels 

of FX volatility marked by uncertainty 

with central banks and heightened 

inflation. During these periods, clients 

especially look towards ECNs to help 

facilitate their distribution and to 

support additional price discovery, 

price construction and their execution 

needs. For Euronext FX, this is 

particularly true in Metals where have 

seen our volumes double since the 

start of the year.” 

Recent years has also seen more 

development around pricing models 

and order management processes. 

“When we look back 10 years ago, 

most clients utilizing ECNs were 

sweeping order books and trading in a 

relatively inefficient manner. As clients 

shifted their focus to overall execution 


NDF trading at 

Euronext Markets 

Singapore 

Euronext FX is a leading ECN for Spot FX and Precious 

Metals, as well as NDFs through its Singapore 

subsidiary Euronext Markets Singapore. Powered by 

award winning FastMatch ® technology, Euronext FX 

with Euronext Markets Singapore has matching engines 

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

technology is leveraged to deliver flexible 

execution solutions and quantitative market data 

products. 

Clients can trade FX NDFs through its subsidiary, 

Euronext Markets Singapore, a Regulated Market 

Operator (RMO) licensed by the Monetary Authority 

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

SG1, Euronext Markets Singapore enables clients to 

access local Asia-centric trading partners with reduced 

latency. NDF liquidity pools are locally managed, 

leveraging the same unique functionalities and 

FastMatch ® technology as in our Spot market. 

KEY FEATURES 

• Local NDF matching available in SG1 and LD4 

engines 

• USD Crosses with: 

• Asia: CNY, IDR, INR, KRW, PHP, TWD 

• LatAm: BRL, COP, CLP, PEN 

• Customised liquidity pools: Including firm and last 

look, anonymous and semi-disclosed, sweepable 

and full amount, SkewSafe 

• Full range of order types including market and limit 

orders, pegged algos and icebergs 

• Unparalleled speed powered by award winning 

FastMatch ® technology and functionality 

• Clients of Euronext Markets Singapore may connect 

through our data centres in Singapore (SG1), New 

York (NY4), London (LD4) and Tokyo (TY3) 

• Connect via FIX API 

• Euronext Markets Singapore has been granted SEF 

equivalency by the CFTC 

• Protection variants including leak/sweep protection 

and full amount lock-in 

Euronext FX is a company of Euronext, the leading multi-asset and pan-European 

exchange with markets in Amsterdam, Brussels, Dublin, Lisbon, Oslo, Paris and Italy. 

sales_fx@euronext.com 

This publication is for information purposes only and is not a recommendation to engage in investment activities. This publication is provided “as is” without representation or warranty of any 

kind. Whilst all reasonable care has been taken to ensure the accuracy of the content, Euronext does not guarantee its accuracy or completeness. Euronext will not be held liable for any loss or 

damages of any nature ensuing from using, trusting or acting on information provided. No information set out or referred to in this publication shall form the basis of any contract. The creation 

of rights and obligations in respect of financial products that are traded on the exchanges operated by Euronext’s subsidiaries shall depend solely on the applicable rules of the market operator. 

All proprietary rights and interest in or connected with this publication shall vest in Euronext. No part of it may be redistributed or reproduced in any form without the prior written permission of 

Euronext. Euronext refers to Euronext N.V. and its affiliates. 

© 2023 Euronext N.V. – All rights reserved. 




“The surge in NDF trading activity is attracting a broader array 

of market makers and liquidity providers helping ECNs to 

expand the liquidity pool available for NDF transactions.” 

Vinay Trivedi 

quality, demand for new order types 

and liquidity pools increased,” says 

Patel. 

“ECNs now offer numerous order 

management mechanisms for clients 

to engage with to improve fill rates 

and reduce impact. Full Amount, Skew 

Safe, Collapse to Mid, Pegs, and Dark 

Orders are just a few of the many 

functionalities designed to improve the 

quality of service and execution for our 

clients. Clients will usually combine 

several of these to create a setup that 

best suits their specific flows.” 

There has also been more focus on 

reducing phantom quotes through 

stricter fill rate/RTT and timeout 

requirements, says Patel. “This 

ensures that books are tradeable and 

are a clear representation of where 

the market is currently at. Growth 

in Full Amount liquidity pools have 

also helped provide clients with 

deeper FX liquidity ensuring they 

are fully dealt while minimizing their 

information leakage. We have also 

noted the increased demand by LPs 

for higher quality data around their 

pricing competitiveness. Euronext 

FX has spent the early part of 2024 

investing capital and rebuilding our 

data infrastructure to deliver on these 

demands. Part of our focus in this 

rebuild is to produce new metrics 

to further encourage additional 

competition at top of book and the 

available depth for takers.” 

“As ECNs warehouse a tremendous 

amount of data, we continue to see 

strong demand for more unique and 

derived data sources as clients want 

to diversify from traditional sources 

for modelling and price construction,” 

says Patel. “To meet these needs, 

Euronext FX recently launched Spread 

The arrival of new trading styles such as algorithmic trading and its focus on minimising market impact and providing 

trading analytics has played into the strengths of FX ECNs 

Matrix which provides consensus 

around where institutional spreads are 

in near real time. On the execution 

side, clients can still route orders in an 

inefficient way to ECNs. In many cases, 

differing flows still remain comingled 

creating inefficient liquidity sourcing. 

The benefits of flow segmentation 

have been realized by clients who have 

been able to isolate specific flows 

for spread compression and reduced 

impact. We see this benefits algo 

desks the most as algo offerings have 

become more complex and liquidity 

demands can shift drastically between 

different strategies.” 

Rigorous policing methodologies ensure 

clients receive a high quality of service, 

but all vary in their implementation, 

says Patel. “Euronext FX has a clientfocused 

approach where we encode 

client requirements like fill rates into 

our opportunity reports for LPs to 

consume and adhere to. Automated 

processes then flag and disable any 

LPs in violation of these predefined 

requirements ensuring the ECN is 

consistent over time in the quality of 

service provided reducing the need for 

time consuming micromanagement 

from clients.” 

ECNs are always innovating to maintain 

their edge in a tight and competitive 

landscape and to preserve their value 

proposition to their clients, says Patel. 

This means greater investment in 

in-house technology to ensure the 

lowest latency and the best chance 

of price discovery. “By investing into 

our matching engine, we are able to 

stay nimble and to quickly develop 

new and unique features to match our 

clients' growing needs. The success of 

our innovations including FlexMatch, 

Collapse to Mid, and our recently 

launched Spread Matrix data product, 

have proven that client demand for 

flexible ECNs is still strong,” says Patel. 

“Looking ahead, we plan to roll 

out a feature called Enhanced Skew 



Protection that focuses on minimizing 

leakage for quotes and orders this 

summer. We also plan to drive our ECN 

growth through our data infrastructure 

investment. We will offer our clients 

additional automation from tag 

recommendations to P&L management 

as ECN microstructure can be complex 

and clients continue to have less time 

to navigate every facet.” 

THERE IS STILL WORK TO BE 

DONE TO THE ECN MODEL 

BUT THE PROPOSITION 

REMAINS COMPELLING 

NDF TRADING SURGE 

The growing demand for NDFs is also 

reshaping the landscape for ECNs in 

the FX market, says Vinay Trivedi, COO, 

Sell Side Solutions, SGX FX. “This surge 

in NDF trading activity is attracting a 

broader array of market makers and 

liquidity providers helping ECNs to 

expand the liquidity pool available 

for NDF transactions. This increased 

liquidity not only enhances price 

discovery (for a rather illiquid market) 

but also improves execution efficiency 

for traders engaging in NDF trading.” 

The growing volume in FX futures, 

such as INR Futures volume at SGX 

Group, is driving a convergence of 

OTC ECNs and listed markets, says 

Trivedi. “This alignment ensures 

consistent and interchangeable 

electronic pricing across platforms, 

enabling traders to access competitive 

rates regardless of venue. This fosters 

arbitrage opportunities, fuelling 

activity on ECNs. At SGX Group, we 

are also working on an OTC to Listed 

Basis Product to further deepen the 

connection between both venues. 

This product would allow for price 

discovery in more liquid OTC markets 

while settling the trade in a more 

capital-efficient listed market.” 

Growth in NDF trading activity on 

ECNs is bolstering market efficiency 

by enhancing price transparency, 

tightening spreads, and refining order 

execution, says Trivedi. “This efficiency 

not only benefits traders and market 

makers seeking to optimize their NDF 

trading and market making strategies 

but also provides a more robust and 

resilient trading environment for NDF 

products. There is a strong trend of 

more and more ECNs launching NDF 

products.” 

To optimise market data distribution 

and order routing transparency, 

ECNs must focus on enhancing the 

quality and timeliness of market 

data while increasing the depth of 

market information. Improvements 

in data aggregation, normalization, 

and latency reduction can contribute 

to better decision-making and price 

discovery, says Trivedi. 

“Providing traders with comprehensive 

depth of market information, including 

detailed views of buy and sell orders, 

empowers them to make informed 

trading decisions and improves order 

execution quality. Additionally, ECNs 

should prioritize transparent order 

routing policies and fair access to 

liquidity. Clearly outlining order 

routing practices, execution policies, 

and ensuring equal opportunities for 

order matching fosters confidence 

among traders and maintains a level 

playing field,” says Trivedi. 

Moreover, streamlined trade reporting 

mechanisms, optimized routing 

algorithms, and robust regulatory 

compliance efforts further strengthen 

the integrity of ECNs, promoting 

market stability and reinforcing 

trust in the ECN model, says Trivedi. 

“At SGX CurrencyNode, under the 

regulatory guidance of MAS, we have 

designed fair rules of engagement 

for market data dissemination and 

order matching. We also publish 

detailed reports to market participants 

analysing the trading activity for 

parameters such as fill ratio, market 

impact, profitability decay and so on.” 

ECNs are also benefitting from a more 

collaborative approach with clients and 

market makers, says Trivedi. “It enables 

the mitigation of liquidity abuse through 

proactive controls and monitoring 

mechanisms, fostering a secure and 

trustworthy trading environment. 

Customized liquidity solutions tailored 

to the specific needs and preferences of 

participants enhance trading efficiency 

and flexibility. By optimizing fill rates 

through fine-tuned order matching 

algorithms and execution processes, 

ECNs can improve execution quality and 

reduce slippage for clients,” he says. 

“Additionally, collaborative efforts 

lead to positive outcomes for liquidity 

providers, ensuring competitive 

pricing, volume incentives, and access 

to diverse trading opportunities. This 

fosters sustainable and profitable 

partnerships while enhancing market 

depth on ECNs. Joint initiatives in 

risk management and compliance 

uphold market integrity, promoting 

fair trading practices and regulatory 

adherence.” 


APIs: 

The driving force behind 

innovation and growth in FX 

trading 

STRATEGIC 

ENABLERS 

NETWORKS, HOSTING & CONNECTIVITY 

REST APIs 

MARKET 

DEMOCRATISATION 

FIX APIs 

INCREASED 

CONNECTIVITY 


Paul Golden 

Paul Golden investigates how APIs are exerting an 

increasing impact across the FX industry, enabling the 

creation of tailored trading solutions that combine off-theshelf 

and bespoke components. 



The FX market has witnessed a 

substantial increase in the number 

of trading venues and APIs have 

become indispensable for accessing 

a broader range of liquidity sources 

efficiently compared to traditional 

user interfaces. This not only enhances 

liquidity management but also 

simplifies the overall trading process. 

“APIs are evolving beyond traditional 

FIX-based streaming of market data 

and order execution to complex 

pre-trade and post-trade workflows,” 

explains John Stead, director of 

sales enablement and marketing 

at smartTrade Technologies. “Their 

use is particularly prominent among 

corporates and commercial customer 

segments where there is a rapid 

adaptation to sophisticated technology 

for evolving hedging and cash 

management needs.” 

MARKET ADVANCEMENTS 

This includes integration with nonconventional 

FX liquidity providers 

that offer payment rails integration, 

and embedding hedging and cash 

management workflows within 

ERP systems. Such advancements 

necessitate not only the evolution 

of APIs available on distribution 

channels for market makers but also 

the development of new pricing 

algorithms and risk management 

strategies. 

“Quant trading firms require access to 

normalised pricing across asset classes 

so that correlations are detected in real 

time and can be fed into pricing and 

hedge decisions,” explains Cormac 

Walsh, head of product for Barracuda 

FX, part of the ION Markets (FX) 

product suite. 

and dealing desks, and bilateral client 

trading relationships to a digital-first 

trading landscape. 

At the same time, API technologies 

enable greater FX market 

democratisation with respect to 

smaller financial institutions and retail 

traders by supporting faster, more 

efficient integrated connectivity to 

multiple liquidity channels, venues and 

trading counterparties. 

API connectivity has long been 

the underpinning technology 

and facilitator for FX algo trading 

strategies, optimising the ability to 

capitalise on market opportunities 

while managing risk explains Tim 

Carmody, CTO IPC Systems. 

“The advent of single, multi-asset 

APIs is a natural progression with 

respect to connecting the buy side 

more efficiently to multi-venue, multimarket 

liquidity channels, including 

crypto asset exchanges,” he says, 

In a market increasingly demanding 

‘any time, any place, any device’ 

trading connectivity, as well as ease 

of access to trading platforms and 

systems, greater system and workflow 

interoperability are increasing 

imperatives in the front to back posttrade 

environment for FX. 

“The real beauty of APIs is that 

beyond their intrinsic value in faster, 

better and cheaper connectivity, they 

sit within a middleware layer which 

means that you don’t have to keep 

making expensive changes to the 

systems themselves, just the proxy in 

the middle - which makes for much 

simpler maintenance in the long 

term,” adds Carmody. 

ELIMINATING FRAGMENTATION 

APIs enable participants to look at 

how new technologies can augment 

existing infrastructures and systems 

in the end-to-end transaction 

lifecycle. Deployed in association with 

microservices frameworks, APIs are 

very effective tools in mitigating the 

traditional challenges of maintaining 

legacy systems and outdated 

infrastructures, and eliminating the 

fragmented business lines, data silos 

and cumbersome workflows that stifle 

productivity and agility. 

API development can be made easier 

by converting monolithic applications 

into containers of microservices 

aligned with different technology 

stacks within an organisation. 

“In addition, by accessing the market 

through an already established 

ecosystem of connected participants, 

new FX market participants can more 

quickly reach a broader and deeper 

community, lowering barriers to 

entry,” says Carmody. “As such, firms 

can deliver new products to market 

more quickly.” 

The rise in algorithmic trading and the 

One of the key ways that financial 

markets participants - including those 

in FX - are evolving is the increasing 

shift from the traditional ecosystem 

of physical trading venues, broker 

John Stead 

“APIs are evolving beyond traditional FIX-based streaming of 

market data and order execution to complex pre-trade and 

post-trade workflows.” 



APIs: The driving force behind innovation and growth in FX trading 

“Trade APIs have been updated in recent years to cater for all 

emerging regulatory identifiers and we would expect these 

tools to be designed to continue to need to change given 

regulatory evolution.” 

Cormac Walsh 

expansion into multiple asset classes 

- including cryptocurrency - is having 

a significant influence on demand 

for API services. However, Stead says 

there is not a strong push for a single, 

all-encompassing API that meets every 

trading need across these diverse 

areas. 

“The primary reason for this stems 

from the high variability inherent in 

different asset classes, which includes 

differences in the volume of data, 

trading protocols, and the level of 

robustness expected,” he says. “This 

variability makes it challenging to 

create a one-size-fits-all API solution 

without compromising specific asset 

class requirements.” 

Additionally, there is a strategic desire 

to avoid a single point of failure. 

Relying on one comprehensive API 

for all trading activities increases risk 

since if it failed it could disrupt all 

trading operations across multiple 

asset classes simultaneously. This risk 

encourages firms to prefer multiple 

specialised APIs that can be integrated 

but remain distinct in their operation. 

“Despite these complexities, the 

implementation of APIs remains 

relatively low cost - especially when 

compared to the potential benefits 

of enhanced trading efficiency and 

access to a broader range of markets 

and liquidity,” says Stead. 

DIVERSE DEMAND 

As the need for API integration 

rapidly expands across new client 

segments, there is a growing 

demand for a variety of API options 

to meet diverse internal and external 

integration needs. The majority of 

traditional trading venues and many 

customers still use FIX APIs, which 

are highly valued for their reliability 

and efficiency in fast paced trading 

environments like FX spot markets. 

However, Stead notes that demand 

for RESTful APIs is increasing as 

these allow for easier integration 

of microservices within existing 

workflows, addressing a broader range 

of use cases with less stringent latency 

requirements. 

“REST APIs are typically preferred for 

accessing static data and have initially 

been used in some trading scenarios, 

such as in the crypto markets,” he 

explains. “However, due to challenges 

such as maintaining order states 

and managing high transaction 

volumes, many crypto venues that 

initially offered REST APIs are now 

also providing or moving towards 

supporting FIX protocols, which are 

better suited to handling real time, 

high frequency trading data.” 

In terms of the specific benefits of FIX 

APIs for firms looking for more cost 

effective control over their trading, 

Walsh refers to the FIX protocol 

providing a level of standardisation 

which means that the incremental cost 

of adding a new venue over FIX is less 

than over a proprietary protocol. 

“APIs are well established within FX 

trading so that the post-trade process 

is fully automated,” he says. “Trade 

APIs have been updated in recent years 

to cater for all emerging regulatory 

identifiers and we would expect these 

tools to be designed to continue 

to need to change given regulatory 

evolution.” 

API technologies enable greater FX market democratisation 

Stead observes that FIX APIs offer 

several distinct benefits that make 


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“The advent of single, multi-asset APIs is a natural progression 

with respect to connecting the buy side more efficiently to 

multi-venue, multi-market liquidity channels, including crypto 

asset exchanges.” 

information and ensuring that 

transaction commands are executed 

reliably, maintaining the integrity 

and confidentiality of financial 

transactions. 


Tim Carmody 

them particularly attractive for firms 

seeking cost effective control over their 

trading operations. 

“With a proven track record of over 

30 years in capital markets, they 

are a mature technology that has 

become a well-integrated and highly 

reliable component of financial 

trading infrastructure,” he says. “Their 

durability and effectiveness in a variety 

of market conditions make them a 

trusted choice for firms of all sizes.” 

EXPERTISE AVAILABILITY 

The widespread expertise available 

due to the extensive use of FIX 

APIs allows for easier adoption and 

integration into existing systems. 

This broad knowledge base helps 

reduce training costs and lowers the 

barrier to entry for new staff and 

firms entering the market, facilitating 

the development of powerful trading 

solutions and customisation of existing 

workflows. 

“FIX APIs also come with a dedicated 

financial data model that includes 

asset-specific information, predefined 

workflows and regulatory data - all 

essential for the smooth operation 

of financial transactions,” says Stead. 

“This standardised model greatly 

enhances operational efficiency and 

reduces the need for developing 

custom solutions.” 

Moreover, the safety and security in 

the transmission and reception of 

data are paramount in trading and 

FIX APIs excel in providing secure 

communication channels. This is 

critical for protecting sensitive financial 

“Overall, FIX APIs provide a robust 

framework that supports cost effective 

trading operations by leveraging 

their historical reliability, widespread 

expertise, tailored financial data 

handling, and stringent security 

measures,” adds Stead. “These 

features collectively empower firms 

to maintain precise control over their 

trading activities while minimising 

overheads.” 

APIs are essential in developing 

advanced liquidity optimisation 

architectures, enabling firms to 

access both traditional and emerging 

liquidity sources (such as new crypto 

markets requiring non-FIX protocols) 

and integrate sophisticated trading 

strategies. 

“Many firms leverage APIs to 

expose internal services that control 

algorithms and integrate them into 

optimised ecosystems where AIpowered 

analytics can interact with 

aggregators or pricing engines,” says 

Stead. The shift includes building 

smart skewed swap pricing, published 

internally via APIs, enhancing trading 

precision. 

“Firms can deploy these APIs through 

custom development for tailored 

functionality or use no-code platforms 

and AI-assisted tools for ease of use 

and rapid deployment,” he continues. 

“Both methods support dynamic 

responses to market conditions, 

effective risk management, and 

improved trading performance, 

highlighting the critical role of APIs in 

modern trading infrastructures.” 

APIs facilitate the normalisation of multiple data flows upfront 

PROCESSING POWER 

Stead observes that APIs are playing a 

pivotal role in enhancing the efficiency 


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API DEVELOPMENT 

CAN BE MADE EASIER 

BY CONVERTING 

MONOLITHIC 

APPLICATIONS INTO 

CONTAINERS OF 

MICROSERVICES 

STRATEGIC ENABLERS 

Stead agrees that it would be accurate 

to describe APIs as strategic enablers 

that have the power to reshape the 

FX trading landscape, particularly by 

enhancing the customer experience. 

“APIs have been integral to the FX 

industry for over 30 years, consistently 

driving advancements in trading 

technology and infrastructure,” 

he says. “Their ability to integrate 

and adapt makes trading platforms 

more responsive and flexible, quickly 

and accuracy of post-trade and back 

office processing. 

trades becomes almost instantaneous 

and error-free. This is critical for 

adjusting to market changes and 

trader demands.” 

reducing human errors that occur in 


“By orchestrating complex processes 

and automating interactions between 

market participants, APIs help reduce 

costs and enable real time processing,” 

he explains. “They are commonly 

used for pre- and post-allocations, 

transmitting detailed information 

to surveillance and regulatory 

systems, and consuming and relaying 

settlement details to back offices, 

significantly reducing the likelihood of 

breakages in automated flows.” 

This automation minimises operational 

risks and saves time. Furthermore, 

APIs facilitate the normalisation of 

multiple data flows upfront, ensuring 

that once integrated the processing of 

manual processes and can lead to 

discrepancies and delays. 

“Additionally, a trend we have 

observed is that sales and middle 

office staff are increasingly performing 

post-trade actions such as edits, 

amendments and splits in front office 

systems, which are all efficiently 

managed via APIs to ensure seamless 

message flow to all downstream 

systems,” says Stead. 

“Overall, by automating complex 

and time consuming tasks, APIs are 

becoming indispensable in financial 

markets, helping institutions improve 

compliance, reduce operational risks, 

and enhance market liquidity.” 

Carmody says this is particularly 

true with respect to enhancing the 

customer experience in terms of 

ease and speed of connectivity and 

communications, market access and 

data exchange. 

“Recognising this, we have already 

consolidated around an entirely APIfirst 

technology and open platform 

enablement strategy that leverages 

other technology paradigms including 

cloud and AI to drive continuing 

service efficiencies,” he says. 

Walsh agrees that APIs could be 

described as strategic enablers that 

have the power to reshape the FX 

trading landscape on the basis that 

client and bank workflows will become 

increasingly automated using datadriven 

decisions. 

According to Stead, the future points 

towards more APIs, reflecting the 

ongoing trend towards increased 

digitisation and connectivity in the FX 

market. 

“As trading systems grow more 

RELYING ON ONE 

COMPREHENSIVE 

API FOR ALL 

TRADING ACTIVITIES 

INCREASES RISK 

complex and interconnected, the need 

for APIs that can communicate across 

platforms and services increases,” 

he adds. “This not only streamlines 

operations but also fosters innovation 

and enhances customer engagement.” 



Why 2024 looks set to 

be a watershed year for 

institutional engagement 

with Digital Assets. 

Though the landscape remains complex, Paul Golden discovers 

that collaborative efforts are being made to establish more 

defined regulations and standards to govern the use of digital 

assets globally. 

DIGITAL CURRENCIES 




Different regions are moving at different 

speeds when it comes to digital assets 

- a trend that underscores the growing 

recognition of the need for oversight and 

consumer protection. 

That is the view of Vinay Trivedi, COO sell 

side solutions at SGX FX who describes the 

SEC’s approval of spot Bitcoin exchangetraded 

products as a significant milestone 

for institutional investors by providing them 

with regulated avenues to invest in Bitcoin 

while diversifying their portfolios. He also 

refers to the positive impact of tokenisation 

in enabling fractional ownership and 

enhancing liquidity on digital asset 

exchanges, particularly for traditionally 

illiquid assets such as real estate or fine art. 

“Automation through smart contracts 

enhances efficiency and reduces human 

error in asset management and tokenisation 

democratises access to investment 

opportunities globally,” says Trivedi. 

“Tokenisation also drives innovation, 

enabling new financial products and 

business models.” 

EXCHANGE EFFORTS 

The digital asset industry is experiencing 

significant advantages from leading 

exchanges prioritising secure platforms and 

robust trading environments. These efforts 

bolster investor confidence, mitigate the 

risk of hacks, enhance market liquidity and 

efficiency, ensure regulatory compliance, and 

foster innovation and product development. 

“Aggregation technology providers will 

also play a crucial role in enabling better 

liquidity management for digital assets, 

much as they have done for the FX market,” 

says Trivedi. “Advanced trading platforms, 

SOR algorithms and market structures will 

provide access to a larger pool of liquidity 

and make trading more efficient, reducing 

transaction costs. New liquidity pools and 

better risk management solutions will 

further boost stability.” 

According to Trivedi, industry initiatives 

on fully regulated and secure ecosystems 


Why 2024 looks set to be a watershed year for institutional engagement with Digital Assets 


“Aggregation technology providers will also play a crucial role 

in enabling better liquidity management for digital assets, 

much as they have done for the FX market.” 

Vinay Trivedi 

for trading, settlement and custody 

of digital assets are contributing 

significantly to market integrity, investor 

protection and overall confidence in the 

digital asset space. 

The surge in institutional trading of 

digital assets has created a demand for 

advanced data and analytics solutions 

tailored to the unique needs of 

institutional investors. 

“Just like FX markets, participants are 

looking to access richer data sets and 

Carlos Martin Doncel 

analytics related to spread, depth of 

liquidity, fill quality, rejection analysis, 

broker quality analysis, post-trade 

mark-outs, patterns study and client 

profitability analysis,” explains Trivedi, 

who adds that the surge in interest in 

digital asset derivatives and advanced 

trading methods like algorithmic trading 

and high frequency trading is driven by 

a combination of technological progress, 

rapid market expansion, institutional 

involvement, risk management needs 

and regulatory developments. 

“Technological advancements 

enable sophisticated algorithms and 

tools, while market growth creates 

opportunities for diverse trading 

strategies,” he says. “Institutional 

participation seeks exposure to manage 

risk and achieve returns. Derivatives 

and algos help mitigate market 

volatility and regulatory clarity boosts 

investor confidence.” 

GEOGRAPHICAL VARIATIONS 

Regional disparities in institutional 

trading and investing in digital assets 

have been influenced by various factors 

including demand dynamics, regulatory 

environments, market structures, risk 

perceptions and the development of 

custody solutions and infrastructure. 

Trivedi reckons Asia in particular 

is poised for significant growth in 

digital asset trading, driven by its large 

population, strong trading traditions 

and increasing government interest, 

with countries like Singapore, Australia, 

Dubai and Hong Kong leading the way 

in shaping the market’s future. 

“Clear regulations facilitate faster 

“Stablecoins, CBDCs and all the other elements of 

tokenisation need to develop further in order to 

accommodate trading activities.” 

adoption, and market maturity and 

risk perception influence investment 

pace with cautious approaches in 

risk-averse regions,” he adds. “Growth 

relies on secure custody solutions and 

infrastructure, favouring regions with 

advanced options.” 

Meanwhile Carlos Martin Doncel, 

product manager for digital assets 

Swissquote says the arrival of spot 

Bitcoin ETFs clears the way for many 

types of institutional investor to get into 

crypto in a region that dominates the 

global financial market. 

“The moment big institutional 

investors (retirement and sovereign 

wealth funds) announce either their 

intention or actual investments into 

crypto, we will see the real potential 

of these ETF approvals” he says. “It’s 

a slow process to change the rules of 

investment funds and I don’t think we 

will see a paradigm shift in institutional 

investment just yet, but it is an 

important development.” 

SETTLEMENT CHALLENGES 

Martin Doncel says banks see 

tokenisation as a way of updating the 

settlement system from scratch. 

“When we talk about securities 

settlement the fiat component is 

often forgotten,” he says. “It is not 

particularly sensible to tokenise a stock 

if the fiat rail is going to take two days 

to settle. Stablecoins, CBDCs and all 

the other elements of tokenisation 

need to develop further in order to 

accommodate trading activities.” 

According to Martin Doncel, crypto 

exchanges have become serious 

competitors to traditional exchanges 

and have encouraged traditional 

markets to think differently, with a 

recent proposal to open the traditional 

market 24/7 for example. 

“You see a lot of fiat payment rails 

following SEPA instant initiatives, for 


instance the Fedwire initiative in the 

US,” he says. “It is healthy to have this 

competition where traditional players 

move towards instant settlement and 

faster transfers.” 

When asked to assess the importance 

of industry initiatives on fully regulated 

and secure ecosystems for trading, 

settlement and custody of digital 

assets, Martin Doncel observes that 

lack of regulation led to the situation 

with FTX and BlockFI – although he 

also notes that systemic hacks to 

centralised exchanges have become less 

commonplace. 

One area that has clearly evolved 

considerably is data analytics. Just 

a few years ago the best option for 

crypto market analytics was a Dune 

community dashboard, which could 

be described as being akin to Power 

BI or Tableau - now there is an entire 

ecosystem of companies, including 

the likes of Token Terminal (recently 

partnered with Bloomberg), Messari, 

Arkham and many other data vendors 

that are specialising in this area driven 

by demand from institutional investors. 

FUND INFLUENCE 

As for where we might expect to see 

regional variations in the growth of 

institutional trading and investing in 

digital assets this year, Martin Doncel 

says large pension or sovereign wealth 

funds have the ability to move the dial 

more than the introduction of spot 

Bitcoin exchange-traded products. 

“For example, if the Kuwait Investment 

Authority said it was holding even a 

relatively modest amount in Bitcoin, 

that would have a massive impact 

on institutional appetite for the asset 

class,” he says. 

“From the infrastructure provider perspective we see 

increasing interest in tokenisation in terms of proof of 

concepts.” 

“It is not easy to receive dollars in 

Venezuela or Argentina, so why 

wouldn’t someone send Bitcoin that 

can be exchanged for local currency,” 

says Martin Doncel. “It remains to 

be seen if any country will buy or sell 

commodities for Bitcoin, but it would 

be a significant development.” 

Looking at the EU specifically there is 

certainly going to be greatly increased 

clarity with MiCA and while this is 

only the first iteration of the crypto 

regulation, it will give investors 

confidence according to Miryusup 

Abdullaev, managing director of 

Deutsche Börse Digital Exchange 

(DBDX). 

“Investors and banks are interested 

in Bitcoin but many of them want to 

start small and therefore the business 

case is very sensitive to integrating new 

systems and service providers,” he says. 

“So it really helps to put crypto on top 

of existing infrastructures which are 

already integrated.” 

ETF ‘VALIDATION’ 

Abdullaev describes the approval 

of spot ETFs in the US as a kind 

of validation of Bitcoin in terms of 

bringing it over the institutional grade 

Miryusup Abdullaev 

threshold, although it remains to be 

seen what specific client segments 

were behind the initial inflows. 

“In Europe we have had exchange 

traded products (ETPs) for Bitcoin and 

other cryptocurrencies since 2020,” he 

adds. “They are slightly different legally 

and operationally to the US spot ETFs, 

but they still effectively offer indirect 

participation in the price development 

of crypto. What we have seen after the 

ETF launch in January in the US is that 

the management fees of these ETPs 

started coming down because clients 

now have other options.” 

On the topic of tokenisation, Abdullaev 

observes that decentralised finance 

Source: ESMA 

Geopolitical tensions are another driver 

on the basis that where there isn’t a 

suitable fiat currency to choose from, 

cryptocurrencies could fill the gap. 

There is certainly going to be greatly increased clarity with MiCAR 


Why 2024 looks set to be a watershed year for institutional engagement with Digital Assets 


BITCOIN HALVING 

The latest Bitcoin halving took place in April 2024, halving the amount of 

Bitcoin awarded to miners for validating transactions in an attempt to limit 

inflation by reducing the supply of new Bitcoins entering circulation. 

According to Trivedi, the halving of Bitcoin is generating demand from 

both retail and institutional investors, indicating a growing interest in 

digital assets within the investment community. 

“However, investors may face some headwinds in capitalising on the 

effects due to a hostile macro environment (higher inflation and delayed 

Fed rate cuts) and ongoing geopolitical risks,” he says. 

Abdullaev suggests that if the inflows coming from issuance of new ETFs 

continue to be as good as they have been since January, the impact of the 

halving should be positive. 

“However, I’m not sure if the halving will increase the appetite of 

institutional investors for Bitcoin per se,” he says. “It is more relevant for 

crypto-native actors and especially mining operators, some of whom 

might no longer have a sustainable operation financially.” Martin Doncel 

says the halving of bitcoin is evidence that it is working as intended and 

agrees that it will have limited impact on institutional investor appetite or 

confidence in the asset. 

“The traditional models look at changes in monetary policy that happen 

with relatively high frequency (monthly), while Bitcoin not only has 

a lower frequency - approximately four years - but is also fixed until 

around 2140,” he explains. “So it is not changes to the rules of emission 

on new Bitcoins that impact the price but rather the macro impacts on 

the quoted currencies.” 

in tokenisation in terms of proof of 

concepts,” he says. “The challenge 

remains getting to volumes that would 

justify the level of investments needed 

to get there.” 

Data analytics is one of the biggest pain 

points for sophisticated market players. 

For example, a hedge fund transferring 

its trading strategy from traditional 

asset classes to crypto just doesn’t 

work without reliable, complete and 

accurate data. “There are established 

data providers for traditional asset 

classes but they don’t reflect the whole 

market, partly because some parts of 

the market are still in offshore locations 

that are unregulated and unreported,” 

says Abdullaev. “But demand will be 

met over time as the market matures.” 

TRADING TRENDS 

When asked about the factors driving 

increased interest in digital asset 

derivatives and more advanced trading 

styles such as algos and HFT, he refers to 

perpetual futures contracts - which are 

already quite popular in the unregulated 

space and are an interesting extension 

for those who want to expand their 

derivatives offering. 

applications - or rather the underlying 

protocols like Ethereum - are really 

good at innovation. Where institutions 

remain sceptical is around their stability 

and compliance, so the longer these 

protocols exist and operate well and 

in best interest of end clients the less 

scepticism there will be. 

“From the infrastructure provider 

perspective, we see increasing interest 

“Around two thirds of traded volumes in 

crypto are in derivatives and the majority 

of that is perpetual futures contracts, 

which shows that clients are interested 

in these instruments to make more 

sophisticated bets on the direction of 

the market,” says Abdullaev. 

The managing director of DBDX 

reckons institutional adoption will 

flourish where there is regulatory clarity 

and a mature market structure as well 

as trusted partners. 

The surge in institutional trading of digital assets has created a demand for advanced data and analytics solutions 

“The EU is at the forefront in all these 

dimensions and the UK is making 

progress, so we are hopeful that 

a regulated landscape will create 

conditions for institutions to engage 

with crypto,” he concludes. 



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