Fortex Inc. recently attended and sponsored TradeTech FX in London, the top conference for buy side focused FX trading. It featured high quality speakers, workshops led by FX leaders, and high-caliber networking opportunities.
“Hundreds of heads of trading and portfolio management in the FX space were there, and the Fortex brand was everywhere,” said attendee Jason Young, Fortex’s Head of Deliverable FX.
While an abundance of topics such as regulatory transformation, rising trading costs, and decreasing liquidity were discussed over the course of the event, a few significant themes stood out:
- Last Look versus Firm Liquidity
- Agency versus Principal Trading
- The Benefit of Non-bank Market Makers
Last Look versus Firm Liquidity: The last look debate in FX is not a new topic of discussion, but with news of investigations by the NYDFS into the handling of last look practices at certain banks, the subject has quickly gained a new level of importance in the FX community. Fortex continues to remain neutral on the topic, allowing clients and LPs to choose how they wish to interact over the platform, in a way that optimizes each participant’s unique trading needs. This can be done via last look or firm liquidity, disclosed or anonymous dealing, and using aggregation or a CLOB.
Agency versus Principal Trading: While currently less of an argument than simply a discussion, dealers at each firm have their own unique opinion on what types of liquidity providers they choose to interact with. There are benefits of Agency (where the bank acts as a broker for its client, sourcing liquidity but not taking on the risk) and Principal (where the bank takes on risk) trading, or even a third Hybrid approach, and it is important for clients to be aware of the model being used by each of its liquidity providers. Fortex interacts with liquidity providers utilizing each approach and works closely with both buy-side and sell-side clients to ensure it is providing a clear and optimal trading platform.
Non-bank Market Makers: With counterparty credit changing in the OTC space, non-bank market makers have been able to fill in some liquidity gaps. It was noted though too the benefits which traditional banks continue to provide their clients outside of pure FX liquidity. Fortex aligns closely with both types of liquidity providers, allowing clients to build their optimal liquidity pool.