Research | SEFs
Potential SEFs surveyed Venue Venue
360T
BGC Partners* Bloomberg* BondVision Cantor
GFI Group* GMI
Hotspot FX ICAP*
ICE (USA)
CBOE Integral CME (ClearPort / NYMEX) Creditex* Currenex
Digital Vega eDeriv
Eris Exchange Exane
FFastFill
Javelin* Kepler
Key Capital
LCH.Clearnet
Louis Capital Market Mariana Capital Kyte Group
MarketAxess*
FlexTrade Newedge FX Connect FXall*
Nodal Exchange ODEX Enterprise
Venue
OTCex Group Parity Energy Phoenix Portware Qantex
State Street* Sunrise Broker
SurfaceExchange Thompson Reuters Tradeweb* Tradition* Trayport trueSEF TruMarx
Tullett Prebon*
Vantage Capital Markets Vyapar
FX Bridge *Top 12 based on product coverage, volumes and current market share and positioning. Source: GreySpark Partners 2012
when they come to connect to these venues. Focussing on the technological aspects, such as the on-going “buy versus build” dilemma facing firms needing to evolve their technology quickly the report makes recommendations including how to select a vendor. It also identifies
Figure 1: Current and Planned Product Coverage by SEFs 100%
75%
50%
25%
0% IRS Full support CDS CDX Planned for SEF go-live FX Commodities Planned for the future Equities Not planned © GreySpark Partners 2012
other key considerations, such as which venues and technologies to consider for pre-trade risk management, the delivery of reference data and accessibility to post-trade reporting and clearing. The report also presents the mix of FIX or native connectivity options that will be available for SEF connectivity. While many venues are aiming to utilise their existing connectivity APIs for their SEF launches, the trend is more towards a FIX protocol-based interface. As a result, many SEFs are currently either offering or planning to support functions over a version of the FIX protocol. Wood remarked: “The Dodd-Frank legislation is pushing firms to connect to a new type of trading venue in order to protect or grow their franchises. We knew it was important to address how our clients are going to adjust from a technology perspective. This research explains the breadth of connectivity options available to SEF participants (see Figure 2) and provides guidance on how to build an actionable onboarding strategy for the major would-be SEFs.”
Best Execution | Autumn 2012 69
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