Go back to the shortlist
Best Foreign Exchange Trading Platform
Average daily volume on Icap’s EBS fell to a new low of $89.8 billion in the first seven months of 2016 – down by nearly 20% from $112.2 billion in 2012. But while the drop in volume is clearly a concern, the figures mask a major transformation in EBS in the past four years into a multi-platform business with a string of new products and services. Following its integration with the BrokerTec fixed income platform in 2015, EBS has continued to push forward, with recent developments including the acquisition of Molten Markets to boost its institutional FX capabilities, the overhaul of its FX market data service and the appointment of Barclays veterans Tim Cartledge and Jim Iorio as chief strategy officer and global head of sales respectively. The forthcoming departure of the group’s visionary leader Gil Mandelzis and the appointment of a new chief executive will herald a new era for EBS-BrokerTec, but the seismic changes ushered in under Mandelzis will leave their mark on the industry for many years to come.
Among a string of new platforms that entered the FX market in recent years, FastMatch has clearly been among the fastest growing in the four years since its launch in 2012 – and it helps that the platform is transparent about the exact volume it trades each day. Average daily volume in the first seven months of 2016 was $12.1 billion, up from $8.4 billion in the full year 2015. An record was set on June 24, following the UK referendum on its membership of the European Union, when FastMatch traded $39.8 billion. Its focus on speed and capacity has remained constant, and the platform runs independent matching engines in New York, London and Tokyo, with a wide range of order types available. In September 2015, FastMatch introduced fully disclosed trading, alongside its anonymous many-to-many service, for a fee of $1 per million USD notional in an effort to reduce costs for users.
Four years from its launch in 2012, it is becoming clear that FXSpotStream is here to stay – and offers a more compelling and unique service than some of the other platforms that launched around the same time. With 12 liquidity providers now live – Credit Suisse, Standard Chartered and Bank of Tokyo-Mitsubishi UFJ became the latest to sign up last year – the platform offers fully disclosed, bilateral trading without transaction fees or commissions. FXSpotStream is owned by a consortium of banks and provides streaming aggregation and matching in FX spot, forwards, swaps and spot precious metals, boasting significant reductions in cost and time to market. In a sign of its growing success and confidence, FXSpotStream began publishing volume data in May 2016. In the first seven months of 2016, average daily volume supported by FXSpotStream reached $19 billion, with substantial year-on-year increases achieved every month.
Following its acquisition by Bats Global Markets in March 2015, the Hotspot currencies platform represents only a small piece of the company’s overall revenue – 8.2%, according to its second quarter earnings release – but it’s a segment Bats is clearly committed to growing. Later this year, Hotspot will launch trading in outright deliverable forwards; the latest in a string of new initiatives developed by the platform’s new owners. In January, Bats unveiled Hotspot Link, allowing clients to tailor customised relationship-based liquidity pools with aggregated price feeds from selected bank and non-bank market-makers. The initiative follows the launch of a new London area matching engine in 2015, designed to boost the platform’s fortunes Europe and Asia. Average daily volume has remained fairly steady at $27.7 billion in the first half of 2016, but the platform scored two record days during recent spikes in FX volatility, with $61.6 billion traded on January 15, 2015, and $59.5 billion on June 24, 2016.
The challenge for many trading platforms – both new and incumbent – is that they often target exactly the same market segment as their competitors and struggle to gain sufficient volume to remain viable. Start-up platform R5 is different in that it has taken aim at a new and potentially fertile breeding ground – bringing electronic trading to emerging market currencies. Launched in 2015 after a fairly long gestation period, R5 is focused steadfastly on the currencies of Brazil, Russia, India, China and South Africa, as well as the so-called ‘Next Eleven’ currencies. With a small team headed up by FX industry veteran Jon Vollemaere, the R5 platform went live with London clients in October 2015 for electronic trading of non-deliverable forwards, extending to live trading in Singapore in April 2016. It’s still early days and R5 does not yet disclose trading volume, but this is clearly a platform to watch.