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market interest from abroad. “Penson is experiencing larger than normal demand from foreign prospects for a variety of products, including those related to hedging client currency exposures from trading equities on the Canadian exchanges, FX margin trading and over the counter currency options,” he notes.
Increasing e-trading volumes
For well over five years official statistics have shown a material growth rate in global electronic FX volumes. Canada is no exception, notes Lorne Gavsie, Managing Director of electronic FX at BMO Capital Markets, based in Toronto, though he says the trajectory has been slower than has been seen in some other countries. “However, the transition to e-FX is now in full swing in Canada, and banks are busy upgrading their technology to ensure domestic clients are not leaving for foreign liquidity providers,” Gavsie remarks.
“To that extent, BMO has been actively expanding its e-FX capabilities. We have increased the number of e-FX access points with our clients over the past several years, both through commonly used electronic communications networks (ECNs) and single-point access. BMO’s FX core strategy is to meet, and serve our clients in the venue of their choice, and to this end our e-FX expansion is a key priority for the firm. Additionally, as a result of our strong position in the Canadian dollar, and as a stable, highly rated counterparty, we have been rewarded with exponential growth outside of our traditional footprint over the past several years,” continues Gavsie. “While many large scale institutional clients continue to execute through
more traditional methods, their focus on post-trade automation often takes precedence over price. To this effect we are investing heavily in our middle and back office technology to provide our customers with all available tools deemed necessary to satisfy their business needs.”
Use of electronic channels
Philippe Savoy, Managing Director and Global Head of FX Electronic Distribution at RBC Capital Markets, says that looking at the market as a whole, Canada will see continued high growth percentage increases, across all electronic channels, be it proprietary or multi-bank. He adds: “More specifically, if we look at individual segments, RBC Capital Markets believe the Canadian corporate sector is likely to show the greatest increase in demand for electronic services. Tis is because compared to institutional and middle market clients, corporate clients have traditionally been less exposed to electronic trading.
However, the current competitiveness and the changing landscape across best execution is driving a definite shift in the corporate space, which will ultimately increase corporate clients’ appetite for electronic services,” he notes.
Continuing, Savoy says: “One of the key drivers for this increase has been the sell-side making necessary improvements in order to ensure the client is able to obtain consistent and competitive
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