REGIONAL e-FX PERSPECTIVE
>>>
“Proximity to primary markets has traditionally kept high frequency trading firms out of Canada, but with collocated facilities now available in all of the major ECNs and low corporate taxes in Canada, there are fewer barriers to entry,” remarks Savoy. “Algorithmic trading means more than just black boxes and fast order entry. Scheduling plays an important part and RBC continues to find new ways to access liquidity and provide best execution for clients, either directly or as an agency service.”
Specialised products and services
Over-the-counter (OTC) derivatives market turnover in Canada. Summary of surveys - Billions of U.S. dollars
Fund and investor perspectives
In comparison with Europe and the US, the domestic hedge fund industry in Canada remains quite small. However institutional fund managers in Canada have been quick to adopt e-FX and as in other countries, a major driver for this has been the need to makes splits and allocations across multiple investment accounts when making a bulk FX trade. Te costs and risks involved in doing this manually are unacceptable. As elsewhere, an important factor behind the increasing volume of e-FX activity among Canadian investment managers and investors has been continued interest in foreign exchange as a tradable in its own right. Broadly speaking, as traditional asset classes become more and more challenged from a ‘rate of return’ perspective, FX is looking increasingly attractive as a separate, tradable asset class in Canada, notes Savoy. “Retail FX is growing and will continue to grow,” he continues. “Just in the same way that people buy stocks for a return, more and more individuals are buying currencies as a way of augmenting and creating alpha within a portfolio.”
“With the recent strength of the Canadian dollar, investors are looking for different asset classes to transact unrelated to their core positions and are treating FX as a separate asset class. In doing so, they are taking a more proactive approach in augmenting returns on their portfolios and generating alpha from currency trading,” says Savoy.
Te Canadian market is currently focused on the leveraged community, which has a high level of sophisticated leveraged funds, says Savoy. “As the client base becomes more sophisticated in Canada, there will be a stronger demand for greater price transparency, more creative solutions, and I would also expect to see an increase in algorithmic and advanced trading execution.”
64 | october 2011 e-FOREX Philippe Savoy “Electronic solutions are evolving as customers are
requesting straight through processing into their down stream accounting and payment systems.”
Evseev comments: “Expanding interest from hedge funds and other professional traders for the one stop shop trading experience is a future prospect for specialised services in this region. Tis includes a suite of custody, cross margining, financing, securities lending, repo and other services which can be collectively thought of as Prime Brokerage. Penson sees large growth potential in this area and is taking active steps towards meeting client needs.”
Savoy adds: “Te FX market is saturated with product offerings outside of research and execution, but ultimately clients are likely to remain faithful to those liquidity providers that remain consistent and reliable in fragmented markets. We have RBC DX which
Source: Te Canadian FX Committee
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174 |
Page 175 |
Page 176 |
Page 177 |
Page 178 |
Page 179 |
Page 180 |
Page 181 |
Page 182 |
Page 183 |
Page 184 |
Page 185 |
Page 186 |
Page 187 |
Page 188 |
Page 189 |
Page 190 |
Page 191 |
Page 192 |
Page 193 |
Page 194 |
Page 195 |
Page 196