Euromoney Foreign Exchange Awards 2023: Global market leader – best FX liquidity provider: UBS
UBS has invested and innovated in its liquidity offering for the last 20 years – the result is its strong reputation for quality and reliability, particularly during periods of market dislocation.
Is reputation for reliable liquidity provision stems from the depth of its footprint. UBS not only offers its deep liquidity on its single-dealer platform (SDP), UBS Neo, of up to 500 million in G5 currencies, or $200 million equivalent in CNH and HKD, but also makes it available to clients over multi-dealer platforms.
As a result, UBS has been able to capture additional volume on its SDP through new clients that have been attracted by the deep liquidity and spread stability on UBS Neo, with SDP market share increasing 25% year on year.
Further, UBS has made progress in minimising its market impact through the enhancement of its skew leakage detection algorithm, allowing it to pinpoint avenues that leak UBS skew into the market. The plug-and-play nature of the algorithm means that it is able to offer it as a software-as-a-service product to clients.
UBS is also a big proponent of transparency in FX markets. The bank was one of the earliest adopters of the Investment Association's initiative to standardise reject codes, and it was one of the first large FX market makers to publish Disclosure Cover Sheets.
In addition, UBS is a driver of market change through its engagement with FX venues to create FX Global Code-compliant liquidity pools.
The introduction of the UBS next generation pricing model is already gaining traction, providing clients with an edge in key markets. The new model is not only able to produce platform cognizant pricing, but also – more importantly – is client-specific through tailor-made client pricing profiles, reflecting liquidity and other client needs.
In terms of FXPM spot execution, UBS provides clients with access to unique liquidity pools across principal E/V and agency FX products.
“Everyone on the team at UBS is thrilled to be recognised by Euromoney as this year’s best global liquidity provider,” says Eric Li, global head of FX linear trading. “One of our biggest successes in recent times, aside from survey data indicating very strong market share and volume growth, has been the client partnerships forged or reinforced around key risk events such as the Ukraine conflict, Turkish lira market dislocation and more recently the market turmoil following Silicon Valley Bank’s collapse.
"Clients value our reliability and the consistency of our liquidity provisioning and competitive spreads across E/V, and feedback suggests that we stand out versus the competition and have built client trust in stressed markets.”