New peer-to-peer FX platform aims to simplify trading
Yet another platform is attempting to crack the notoriously challenging corporate peer-to-peer FX market with the promise of simplifying trading for buy-side clients.
Buy-side peer-to-peer (P2P) FX netting service provider Siege FX went live late in February with its first members’ group, promising to reduce execution costs and minimise market impact for clients.
Given that its service has been live for only a few weeks, the firm can’t comment on how P2P trading volumes have been impacted by the market volatility and reduced economic activity caused by coronavirus.
We remove market impact and facilitate resting order rebalancing without information leakage
But head of distribution Marek Robertson says there is evidence that the assumption of risk has continued to shift from the sell side to the buy side in spot FX.
“This links to a similar theme around increased uptake of bank client execution algos, both of which support growing interest in peer-to-peer,” he adds.
Based on back-testing of trade data against its early adopter client group using transaction cost analysis, Siege FX reckons its clients could save more than one basis point, equivalent to about $100 for every $1 million traded, across the top 20 currencies after fees.