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Wematch strengthens team

Wematch, the global multi-asset-class, web-based matching and negotiation platform, has appointed Jack Jeffery as Chairman of its Board.

With more than 35 years’ experience in financial markets, Jack was previously CEO at electronic fixed income platform MTS and also at EBS, the spot FX electronic broking platform. Jack served 11 years at Citigroup, where he was Global Head of FX options.

Jack has previously served on the Bank of England and US Federal Reserve Foreign Exchange committees and hisappointment follows Wematch’s recent funding round, which saw banking titans J.P. Morgan and Société Générale – both users of Wematch – invest in the fintech. There are now 40 banks and more than 750 traders using Wematch’s platform, with more currently onboarding.

Wematch provides technology to transform how traders match, negotiate and manage trades. This brings the audit and control benefits of electronic tools to trading, delivered as web-based software-as-a-service technology. This significantly cuts costs and, enhances the orderly execution of processes for traders, enabling seamless settlement.

Despite the growth and benefits of e-trading, in some markets institutional investors still conduct most of this activity over the phone, or through interdealer brokers. It is estimated that more than 80% of structured products and 80% of FX derivatives are still transacted by voice. To put it into context, the interest rate swaps market is worth $2.1 trillion a day, with more than 70% of that business handled by phone negotiation.

Jack Jeffery, Chairman of Wematch, said: “The Wematch platform represents an extraordinarily significant step forward in the world of inter-bank trading. Its proprietary architecture enables enhanced efficiencies, providing enormous cost benefits as well as improving regulatory compliance. As a neutral platform that is constantly developing to the markets’ needs, Wematch is reshaping the trading market. It is the right product at the right time.

“Having built my career bringing electronic innovation to the capital markets, I am thrilled to be part of a team that is leading such a profound transformation in the market.”

Joseph Seroussi, co-CEO of Wematch, said: “The voice market remains robust and an integral part of the trading process – its continued usage is a demonstration of its fundamental importance to participants’ business. But it is time that traders have the best technological tools to facilitate optimal trading with confidence. Jack Jeffery’s experience will be invaluable to Wematch as we work to bring the benefits of electronic trading’s auditing and transparency to traders across capital markets.”

Gregory Mimoun, co-CEO of Wematch, said: “Jack has an impeccable track record of steering technical innovation across multiple asset classes which have benefited those markets enormously.

“His appointment is a significant vote of confidence in our technology and our business. We are delighted to welcome him to Wematch as we move to the next exciting chapter in our vision to transform trading markets.”

Forex Broker FXCM Launches Basket of 5 Cryptos for Retail Investors

Foreign exchange trading platform FXCM Group has launched a basket of five cryptocurrencies aimed at retail investors.

Dubbed CryptoMajor, the basket product includes bitcoin (BTC), XRP, litecoin (LTC), bitcoin cash (BCH) and ethereum (ETH), which are equally weighted to protect against market volatility, the firm said in an announcement Monday. The five cryptos are already traded on its platform.

Speaking on launch, CEO Brendan Callan said the product simplifies crypto investment for retail users:

“Trading a basket of cryptocurrencies means our users are freed from the hassle of constantly monitoring the markets. CryptoMajor therefore streamlines the trading process and protects our customers from unanticipated and adverse market movements.”

The product is targeted at customers seeking to enter the nascent crypto market, Callan said, but who “don’t want to risk too much overexposure.”

Under its previous owner, Global Brokerage, Inc, FXCM notably lost its license with the Commodity Futures Trading Commission, in addition to receiving a $7 million fine, for trading against its own customers in 2017, according to the Financial Times.

After two of the company’s founders were banned from the U.S. financial industry, the London-based company exited the U.S. market. It’s now majority owned by Leucadia Investments, part of the Jefferies Financial Group, according to the FXCM website.

LiquidityEdge licenses Mosaic MSX analytics platform

Liquidity Edge, the electronic US Treasuries trading venue, has signed a deal to license Mosaic Smart Data MSX platform to provide venue analytics across its portfolio of marketplaces.

Mosaic Smart Data will give LiquidityEdge a package of analytics that will help the latter to monitor and compare liquidity in the markets to ensure smooth market operation, better trading efficiency and growth facilitation.

These additional analytics will help in comprehending the transaction flow and behaviour of market participants and calculation of market impact, as well as transaction costs. The MSX platform has anomaly detection tools that are built on machine learning tools, that will point to any abnormal market activity that may trigger a rising issue. So, once such an action is detected, preventive measures will be taken to maintain normal market operations.

Market liquidity in fixed income decreases and this creates an obstacle for trading venues to acknowledge possible challenges in their platforms in advance and fix the issues, so solution to fix this problem are constantly sought after.

The deal between LiquidityEdge and Mosaic Smart Data is the result of long collaboration between the two to develop analytic tools for trading operations. The service will be first used by LiquidityEdge on the back-end to get insights on the performance of the trading venue, and afterwards – for insights for market participants.

LiquidityEdge will serve as a SaaS feature with the MSX platform fully managed by Mosaic Smart Data.

This is what the CEO of LiquidityEdge, Mr. Nichola Hunter said:

“We built LiquidityEdge to challenge existing market structures and ‘business as usual’ in the Treasuries market. So, we’re always on the lookout for innovation which will enable us to deliver a better experience to our users. The MSX platform harnesses the power of our order book to deliver finely grained analysis and actionable insights delivering performance improvements for LiquidityEdge and our users.”

JP Morgan and SocGen invest in Wematch

JP Morgan and Societe Generale have invested in fintech firm, Wematch, as the company advances its plans to transform traditionally voice-traded financial markets.

Wematch provides technology which augments how traders at banks match, negotiate and manage trades. This brings the audit and control benefits of electronic tools to voice trading, delivered as web-based software-as-a-service technology.

There are now 40 banks and more than 750 traders on Wematch cross assets with more onboarding and billions of dollars in deal flows matched using its technology.

Despite the growth and benefits of e-trading, in some markets institutional investors still conduct most of their trading over the phone, or through interdealer brokers.

Wematch delivers the benefits of the newest web technologies to traders at banks, improving the matching and negotiation process, cutting costs for banks and increasing efficiency and reducing conduct risk for traders.

Wematch came through J.P. Morgan’s In-Residence Programme and Societe Generale’s Global Markets Incubator to foster the expansion of the fintech’s offer across asset classes and instruments.

The funding takes J.P. Morgan’s and Societe Generale’s relationship with Wematch from users to investors, with the banks already active on Wematch across all existing platforms.

There is enormous potential for Wematch to help the capital market industry in further adopting digital solutions across multiple markets globally, and to adapt this awarded technology to internal and client-facing solutions.

Despite pressure from regulators for more trades to be conducted on electronic trading venues, it is estimated that over 80% of structured products and FX derivatives are still transacted by voice.

The interest rate swaps market is worth USD 2.1 trillion a day, according to the Bank for International Settlements, with over 70% of that business handled by phone negotiation.

Gregory Mimoun, co-CEO of Wematch, said: “Wematch is delivering the next generation in trading protocols, with intuitive GUIs and workflow tools to give voice trading professionals the edge. Everything we build is designed to support the trader’s decision, giving them the tools to make the right call with confidence and certainty.”

Joseph Seroussi, co-CEO of Wematch, said: “Wematch is leveraging on the latest available technologies and the traders’ community permanent feedbacks and inputs to develop its capital market solutions. Our objective is to have a significant impact on the bottom line expenses of Financial Institutions by rolling out the Wematch technology on all markets, internal, or dealer-to-client activities.”

Pasquale Cataldi, Head of Markets Lab, J.P. Morgan, said: “J.P. Morgan was an early supporter of WeMatch. As a member of our InResidence Programme, the platform showed real potential to transform the interbank interest rate dealing market through automation, resulting in audit and control benefits. The level of market adoption has already been encouraging and we’re delighted to continue the journey with them.”

Albert Loo, Deputy Head of Sales for Global Markets at Societe Generale, said: “Societe Generale is excited to contribute to the Wematch development after a successful collaboration within our Global Markets Incubator. Innovation in trading technology will drive efficiencies for market participants and we strongly believe that Wematch can sustainably improve dealing processes across asset classes.”

Wematch launched its interest rates offering in June, with 10 banks matching and negotiating Euro IRS curves, butterflies, basis and gadgets structures, with single stock & Index options to follow in the coming months.

This was built on existing Wematch services for securities lending and equity derivatives and the firm now plans to build out services to more asset classes and instruments.

FXCM Group Adds Ripple and Bitcoin Cash To Expand Crypto CFD Offering

FXCM announced today  that it has expanded its cryptocurrency offering with the addition of Bitcoin Cash and Ripple.

Since launching crypto CFDs in 2018, FXCM has seen rising demand from retail clients seeking to expand and add new cryptocurrencies to their portfolios.

Bitcoin Cash is borne from Bitcoin but has the capacity to process more transactions due to a larger block size. Ripple tokens, known as XRP, have also become increasingly popular with retail investors.

By trading these cryptocurrencies as CFDs, FXCM traders have the incentive potential opportunity to go both long and short. Micronized CFD contracts allow clients to place trades in fractions, which lowers the minimum margin required to enter a position. In addition, profits are credited to a trader’s account instantly, rather than held in a crypto wallet or cold storage.

Brendan Callan, CEO of FXCM Group, comments: “Having successfully launched three different cryptocurrencies in the past 12 months, our clients are asking us to improve the range of crypto CFDs they can access. The addition of Bitcoin Cash and Ripple marks the latest stage of growth for FXCM’s burgeoning cryptocurrency offering and is in direct response to increased demand from our clients.”

 

LiquidityEdge posts record trading volumes in February

Electronic US Treasuries (UST) trading venue, LiquidityEdge, has announced it experienced record trading volumes during February 2019.

On February 28, participants traded over USD 31 billion (single count) across both on-the-runs and off-the-runs. It also experienced a record week last month, with USD 101 billion traded between 21-28 February.

The surge in activity was due to the treasury auctions, calendar rolls and the record number of unique participants benefiting from the directed, disclosed model championed by LiquidityEdge. The flexibility in its structure allows clients to choose between one-to-one or many-to-many models, facilitating a combination of anonymous and/or disclosed streaming executable prices creating a bespoke order book for each participant.

This follows on from its record month in January, where it recorded average daily volumes of USD 16 billion, representing a rise of 250% from 2018. A recent Greenwich report referenced LiquidityEdge’s rapid growth and linked it to the rising buy-side interest in aggregating and trading via direct pricing streams

LiquidityEdge is the first US Treasury venue to genuinely challenge the existing market structure that resides between bifurcated D2D and D2C, taking market share from both the traditional interdealer exchanges and RFQ platforms. Since launch, over 100 clients have joined the system, with end users including primary dealers, regional dealers, asset managers, and hedge funds.

The company was founded in 2015 by Wall Street veteran David E. Rutter, who also set up enterprise blockchain firm, R3.

Nichola Hunter, CEO of LiquidityEdge said: “This trading data demonstrates that we are successfully challenging market structure and bringing about change in the largest global fixed income market for the benefit of participants. We expect our market share to continue to grow based on our deep customer pipeline and number of clients currently integrating into the platform.”

Global FX market remains buoyant

The publication of the Bank for International Settlements’ (BIS) Triennial FX Survey results revealed some fascinating findings.

As always, it continues to be the single most comprehensive, trusted and aggregated account of what has been going on in currency trading across venues, jurisdictions and a whole range of macro and micro criteria, and is keenly anticipated by the FX market.

So what did the report tell us?

The headline figure was that, as widely expected, average trading volumes fell slightly to USD5.1 trillion per day, down from USD5.3 trillion in 2013.

But this doesn’t tell the full story; the report found that the appreciation of the US dollar between 2013 and 2016 reduced the US dollar value of turnover in currencies other than the US dollar. This means that, when valued at constant exchange rates, turnover increased by about 4% between April 2016 and April 2013.

This a reality check for everyone with skin in the game. It tells us that the market has been reasonably resilient in the face of many challenges; the SNB revaluation, issues around conduct and low interest rates in major economies to name a few.

While spot transactions fell from USD2 trillion to USD1.7 trillion per day, the decline may have been driven by two main factors. Firstly, the unwillingness of major financial institutions to commit to risk taking activity, and a drop in market volatility. This means the alternative investment community and speculative traders, who are quite active in the spot market, are doing fewer transactions.

The geographical breakdown of trading is also interesting. When BIS last reported in 2013, London was the main FX trading centre by a comfortable margin, with more than 40% of all traded volumes, followed by New York. While London has continued to retain its crown three years on, activity has fallen by 5%, and New York’s share remains flat.

But Asia gained significant ground; Singapore (7.9%), Hong Kong SAR (6.7%) and Japan (6.1%) all increased their market share. The region continues to develop its currency markets and cross border trading continues to increase; it is a positive growth story for the FX market.

In terms of currencies, USD and EUR continue to remain unchallenged as the most actively traded, but the renminbi gained strong ground by moving into 8th place on the list. Emerging market currencies performed well overall, accounting for more than a fifth of trading.

Lastly, the banks have shored up their positions in the industry, in spite of the regulatory and conduct challenges the sector has faced.

Their position as the main FX trading posts was being challenged by a resurgent non-bank FX trading community, exemplified by the entry of XTX Markets in the top ten of Euromoney’s FX survey.

But trading has increased amongst the interdealer community, accounting for 42% of turnover in April 2016, compared with 39% in April 2013. Banks that are not reporting dealers accounted for a further 22% of turnover, while institutional investors were the third largest group of counterparties at 16%.

So overall, the global foreign exchange market continues to remain buoyant. It remains the largest and most liquid market in the world and a critical component of the global financial system.

As confidence in FX is restored through the global code of conduct and other initiatives, we will see a more liquid and stable marketplace emerge.

All FX Eyes on BIS Triennial Survey

The whole FX industry is watching for the Bank for International Settlements’ Triennial FX Survey results, due this afternoon at 2pm GMT.

Why does it matter? Chiefly because it is the single most comprehensive, trusted and aggregated account of what has been going on in currency trading across venues, jurisdictions and a whole range of macro and micro criteria.

It’s a reality check for everyone with skin in the game. It tells us what currencies are trading the most, where and by what means.

It also gives us a sneak peek at the real market share of the FX market transacted on the electronic platforms and through voice trading.

When BIS last reported in 2013, London was the main FX trading centre by a comfortable margin, with more than 40% of all traded volumes.

USD and EUR remained unchallenged as the most traded currencies, but the renminbi gained strong ground by moving into 9th place on the list. It will inevitably be higher on this occasion.

Since then, the market has experienced the SNB revaluation, issues around conduct and interest rate divergence among the major central banks.

Some established currency trading venues also lost market share and were hampered by reduced trading volumes. This points to a number of themes. Firstly, internalisation of trades at banks; secondly, a drop in overall volatility and trading opportunities; and third, greater competition from upstart trading venues, who grabbed a piece of the FX pie.

The position of the banks as the main FX trading posts is also being challenged by a resurgent non-bank FX trading community, exemplified by the entry of XTX Markets in the top ten of Euromoney’s survey.

This continues the trend evident in past Triennial Surveys. The counterparty segment that contributed the most to growth in global FX turnover between 2010 and 2013 included smaller banks that do not act as dealers, institutional investors, hedge funds and proprietary trading firms as well as official sector financial institutions, among others.

In the 2010 survey, this segment surpassed other reporting dealers (i.e. banks trading in the interdealer market) as the main counterparty category in the Triennial Survey for the first time.

What this shows is that the funds and HFTs are established as major players and are cleaning up their act to become genuine makers and takers in the market. This is an inevitable evolution and blurring of the buy and sell side.

This afternoon we expect the BIS to report relatively flat volumes, if not a dip on 2013. The gallery of top traded currencies will remain broadly the same but the devil will, however, be in the detail and the percentage movements showing direction.

There is will be many things to look out for. Which currencies were the most traded? Will London retain its FX crown? Which instruments were the most popular?

All will be revealed in the next few hours. The industry awaits…