Control of Execution Processes Across Asset Classes, coupled with Cross-Asset TCA, Wins Over the Judges
Buy-side market participants are now more in control of their foreign exchange execution processes. This shift is the result of regulatory drivers requiring the satisfaction of best execution requirements and the sell-side’s decreasing ability to warehouse risk. Usage of algorithms, pre- and post-trade analytic tools, and access to pools of liquidity are all decisions that asset managers now make with the help of cheaper and dramatically improved technology.
“Certainly, within the buy side – particularly the asset manager space – access to the electronic trade and to the technologies that allow them to take control of their entire trading life cycle have been a monumental shift for them,” says David Ullrich, senior vice-president, execution strategies, at FlexTrade Systems – the judge’s choice for the Best Trading Technology Vendor award at the 2016 FX Week e-FX Awards.
“They are no longer incumbent on handing off trades to be executed, but actually manage the process themselves in concert with the sell side. I think, by marrying the two components a bit more directly – the buy side and sell side – and sitting in the middle of it, we are uniquely poised to help deliver that best execution framework,” he adds.
Institutional traders worldwide use FlexFX and MaxxTrader to white-label liquidity, manage execution and aggregate liquidity across spot, forwards, swaps, non-deliverable forwards and precious metals. With these configurable tools, clients gain access to: liquidity from more than 50 banks; electronic communications networks and exchanges; real-time risk management, aggregation and filtering; pre-packaged and customisable algorithms; and various broker algos.
“We have had an excellent experience with FlexTrade, from initial onboarding through to diverting the bulk of our flow through them. The FlexTrade systems are stable and sophisticated. Their service and support are exemplary,” one customer says.
“It really comes down to the changing nature of the FX markets. On the buy side, FlexTrade has been able to work with clients to customise each individual solution it delivers. We are able to build on that because we have such a flexible solution, and clients see the value in working with a company that also understands cross-asset trading. So if they have a trading desk that trades multiple asset classes, it is not just understanding the FX trading process, but also understanding what the firm does as a whole,” says Peter Bondesen, FX sales manager for Europe, the Middle East and Africa.
FlexTrade also offers clients a multi-asset transaction cost-analysis (TCA) tool, which captures real-time tick data, including full depth of book from all liquidity streams, allowing for extensive post-trade and slippage analysis, as well as quantifying execution quality with measures such as fill and reject rates, average fill size and other valuable statistics.
Additionally, as the tool works across asset classes, it represents more value for money.
“When considering the budgets the buy side allocates for TCA per asset class, FlexTrade’s cross-asset system with TCA is a very compelling offer,” Bondesen says.