REPRINTS PRINT OR WEB VERSIONS
and a key way we continue to differentiate ourselves, is to innovate in ways that creates value for our clients by investing wisely, over and over again.”
Straight-through-processing and connectivity services will be more important than ever, as new trade flows and business processes are adopted. Addressing new clearing-related concerns regarding margin calculations, risk offsets, position portability, CCP default waterfalls and procedures, etc. will require prime brokers to invest in additional client-facing resources to help increase understanding.
How do you see the future of FX broking? FX broking has developed to a very diverse and sophisticated level, with clients continually demanding more from their providers. The ability to offer both online and offline trading facilities such as desk dealing, is becoming more and more important to clients as they seek a complete trading service via one provider. Despite extreme market volatility in recent times, algorithmic trading strategies continue to do well – on both the buy and sell side – and I think fund managers and investors will continue to enhance or add these strategies to their investment mix. Therefore algorithmic trading as an execution and risk management tool will continue to evolve. Clients are also becoming more selective in terms of the provider and the product they use, so a regulated environment has and will continue to play an important role.
A great deal of integration, testing, risk simulation and on-boarding work lies ahead to prepare clearers and their clients for central clearing. In short, the cost, both fixed and variable, of being in the FX PB business is set to increase.
However, Pla believes that OTC Clearing will offer interesting new opportunities to simplify an increasing complex post-trade world. Clients grappling with new costs and new processes associated with central clearing are looking for convenience, safety and value. He says there is scope for addressing these needs through innovation in areas such as margin/cash management, collateral management, reporting and client service, the latter being especially important for multi-asset class prime services’ clients eager to consolidate their queries though a single point of contact for FX, CDS, IRS, etc.
Is market growth slowing now? Which regions and markets are driving the future growth of buy side FX? Despite less available liquidity and fewer participants in the market, recent FX volumes announced show that FX volumes continue to rise, albeit at a much slower rate than in previous years. Statistics produced by the UK’s Foreign Exchange Joint Standing Committee show that overall trading volumes for 2008 increased by 21% with spot trading up by 40% to $182 billion. Similar statistics in the US show an overall increase of almost 9% with spot trading increasing by 27% with Singapore and Canada following the pattern of falling swaps and options but rising spot. So although the market conditions may be difficult at the moment, FX still continues to grow.
Conclusion
To order reprints of any article in e-Forex or request further information please contact:
Tel: +44 (0) 1208 82 18 01 Fax: +44 (0) 1208 82 18 03 Or e-mail:
Helen@Aspmedialtd.com
FX as an asset class continues to grow and it continues to grow across different client segments, but even as the world becomes more electronic, there is still much work to be done on FX options to provide the same STP flow for options without manual interaction, whether they are traded on a SEF or an expanded ECN. With product innovation firmly at the heart of the FXPB offering, greater automation of FX options is mostly likely to come from the prime brokers, and to what extent clearing will be integrated into the platforms remains to be seen, but it will most likely be central part of the new model for FX prime brokerage that is emerging.
How is the market changing? How do you see the FX market forging ahead in the next two to three years? In the current economic climate it is difficult to predict what the market will be like in two or three years time. However for 2009 I would say that we will see a ‘back to basics’ approach where investors will think more about what they are investing in and will stay much closer to their investments. This will benefit the FX and commodities market because of the simplicity of the underlying assets: vanilla and low-complexity products will become more popular with clients and investors, as well as corporates for hedging. As cost and efficiency continue to remain a focus, the role of technology will be essential in 2009 and the challenge for banks and providers will be to deliver superior products and service with competitive pricing that meet the needs of clients. Squared Financial is well placed to build on its current success and our offering continues to evolve in tune with our clients needs.
RETAIL e-FX CLIENT FOCUS
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