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Aggregation is here to stay, say technology providers

FX Week, November 2012 - Aggregation technology is the best way to manage the increasingly fragmented foreign exchange trading landscape, and banks need to have such tools at their disposal if they don’t have adequate in-house technology, according to speakers at the FX Week Europe conference in London.

Citing a survey of second- and thirdtier banks carried out by his sales team, Hormoz Amir Faryar, senior sales manager at Abu Dhabi-based brokerage ADS Securities, said the vast majority of firms are looking to aggregation to manage the challenges posed by the multitude of trading venues.

“Everyone more or less is heading towards aggregation tools – I’m sure that could change, but that’s where we’re heading at the moment. Aggregation isn’t done yet; there is still a lot going on in that field. There have been more startups in this area recently and the reason they are there is because there is a market for it,” said Faryar.

Despite the proliferation of trading platforms in recent years, and the multitude of channels through which FX can now be traded, David Mercer, chief executive of LMAX Exchange, predicted spot FX would move entirely to an exchange-based model over the next 10 years.

“Spot FX trades 50 times the volume of the New York Stock Exchange every day – we don’t need dark pools; we don’t need this opaque over-the-counter marketplace; liquidity providers don’t need last look. Surely a level playing field, with the ability for everyone to access that level playing field on an open order book, like they’ve done in every other asset class, is the way forward? Fight it all you like, and create dark pools in the short term, but platforms you see now will be exchange-based in a decade,” said Mercer.

Other panellists were sceptical of Mercer’s prediction. “Banks are getting much more efficient at market-making to different client segments, so they’ll tend to put in separate liquidity streams where they may get much tighter spreads than you’d get on an exchange. So we’re seeing not just fragmentation in terms of venues, but fragmentation in terms of liquidity streams to established liquidity providers, and that’s where aggregation is key. Although I like the exchange model, the reality is that there’s just more fragmentation going on,” said Peter Atkinson, head of FX product management at SmartTrade Technologies.

Meanwhile, Yaacov Heidingsfeld, chief executive of liquidity management technology provider TraderTools, argued there would continue to be demand for both transparent and opaque trading venues, also known as dark and lit liquidity pools.

“I do believe there is demand in the marketplace for both lit and dark pools, and to the extent liquidity redistributors are able to provide the liquidity providers with a look into the kind of business they’re doing, they’re going to get improved pricing and be able to compete more effectively for their customers,” said Heidingsfeld.

View the FX Week article online or download as a PDF -

Media Contacts

For further information please contact:

LMAX Exchange (London):
Barbara Pozdorovkina T: +44 20 3192 2510 E: press@lmax.com

About LMAX Exchange

Recognised as one of the UK’s fastest growing technology firms for three consecutive years (2015, 2014 and 2013 Sunday Times, Tech Track 100), LMAX Exchange is the leading MTF for FX, authorised and regulated by the FCA. Servicing retail brokers, funds, corporates, asset managers and banks, LMAX Exchange delivers a unique vision for global FX trading - a transparent, neutral, level playing field for all market participants, regardless of status, size or activity levels.

The LMAX Exchange OPEN order book is driven by streaming, no ‘Last Look’ limit order liquidity. LMAX Exchange offers a range of key products, including spot FX, precious metals, commodities and equity indices, with complete pre and post-trade transparency and order execution where no ‘last look’ is standard. Orders are executed in strict price/time priority.

LMAX Exchange – the emerging benchmark for global FX.

Business growth awards:

2016, 2015 Winner – Deloitte UK Technology Fast 50 more

Deloitte UK Technology Fast 50 is a ranking of the 50 fastest-growing technology companies in the UK, based on percentage growth of fiscal year revenues over the last four years. close

2015, 2014, 2013 Fastest Growing Tech Company in the UK – The Sunday Times Tech Track 100 more

LMAX Exchange has been recognised amongst the UK’s fastest growing technology firms for three consecutive years. Tech Track 100, compiled by Fast Track annually and published by the Sunday Times each September, lists Britain’s 100 fastest-growing private tech companies based on sales growth over the last three years. close

2016, 2015 Winner – Deloitte EMEA Technology Fast 500 more

The Deloitte EMEA Technology Fast 500 pre-eminent technology awards program is a ranking of Europe, the Middle East, and Africa's fastest-growing technology companies based on percentage revenue growth over three years. close

2015 Recognised as a Tech City Future Fifty company – Tech City UK Future Fiftymore

LMAX Exchange is part of the Future Fifty programme, focused on accelerating the success of high-growth tech businesses. close

FX industry awards:

2016, 2015, 2014, 2013 Best FX Trading Venue - ECN/MTF – WSL Institutional Trading Awards more

LMAX Exchange has been awarded The Wall Street Letter Institutional Trading Awards “Best FX Trading Venue - ECN/MTF” for four consecutive years. WSL awards honour excellence among providers to the institutional trading industry. close

2016, 2015, 2014, 2013 Best Margin Sector Platform – Profit & Loss Readers' Choice Awards more

LMAX Exchange has been awarded The Profit & Loss Readers’ Choice Awards “Best Margin Sector Platform” for three consecutive years. These awards are voted on by the readers and recognise excellence within the foreign exchange industry throughout the previous year. close

2014 Best Infrastructure/Technology Initiative – WSL Institutional Trading Awards more

LMAX Exchange has been awarded The Wall Street Letter Institutional Trading Awards “Best Infrastructure/Technology Initiative” in 2014. WSL awards honour excellence among providers to the institutional trading industry. close

2013 Best Execution Venue – Forex Magnates Awards more

LMAX Exchange has been awarded the Forex Magnates Awards “Best Execution Venue”. The awards are granted to the top firms in their categories and announced at the annual London summit. close

Financial technology awards:

2016 Best Trading & Execution – HFM US Technology Awards more

The HFM US Technology awards recognise hedge fund technology providers that have demonstrated exceptional customer service and innovative product development in the past 12 months. close

2013 Best Overall Testing Project – The European Software Testing Awards more

The European Software Testing Awards (TESTA) recognise excellence and innovation in the software testing and quality assurance across a variety of industries. close

2011 Best Trading System – Financial Sector Technology Awards more

The FST Awards recognise excellence and innovation in the field of information technology within the UK and EMEA financial services sector. close

2011 Innovative Programming Framework – Oracle Duke's Choice Awards more

Oracle’s Duke's Choice Awards celebrate extreme innovation in the world of Java technology and are granted to the most innovative projects using the Java platform. close

LMAX Limited operates a multilateral trading facility (MTF). Authorised and regulated by the Financial Conduct Authority, FCA Registered no. 509778.