LMAX eyes US market play

LMAX Exchange

Wall Street Letter, June 2013 – A US-based matching engine may be in the cards for LMAX Exchange, the London-based multi-lateral trading facility for foreign exchange, according to CEO David Mercer.

The company is looking into New York as the location for a new matching engine, he said. “All the major players have matching engines in London and New York,” he added. The company will first build up the business in London to create a solid base, he said, adding the US play would likely be next year.

“We need to be in New York at some stage in the next 12 to 18 months,” he said. The company has been considering such an expansion for a while, factoring the potential expansion into decisions about which data center to use, he explained. “We chose the LD4 data center [Equinix’s data center in Slough, UK] because of its cross connection to NY4 [the Equinix data center in Secaucus, NJ].”

The new location would follow the launch earlier this year of the MTF’s second venue, LMAX Interbank, which targets bank-only trade matching.

The platform is based on LMAX’s existing software and the target audience was, in some cases, already using LMAX Professional, the original platform targeting brokers, fund managers and proprietary firms. After four months in operation, the venue has 15 banks participating, Mercer said.

Traction so far has come from firms that are familiar with the MTF, and the fact that liquidity providers look to connect to major platforms, Mercer said.

Going forward geography will be a big driver of the business and the increase in buy-side institutions using FX as an asset class to support fundamental strategies, he added.

“When they use FX, there’s huge liquidity, so right or wrong they’re not stuck in a position, can get in and out quickly and there’s no limit to size,” Mercer said.

Download as a PDF –

Business and Technology   asset class   LMAX Exchange  

Any opinions, news, research, analyses, prices or other information ("information") contained on this Blog, constitutes marketing communication and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the information contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. LMAX Group has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX Group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the produced information was obtained from sources deemed to be reliable, LMAX Group does not provide any guarantees about the reliability of such sources. Consequently any person acting on it does so entirely at his or her own risk. It is not a place to slander, use unacceptable language or to promote LMAX Group or any other FX and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.