The migration from voice trading to electronic execution in foreign exchange markets continues to build momentum, and the results of the EuromoneyFXNews e-trading survey show that buy-side clients expect this growth to continue.
Voice trading makes up, on average, 18% of all executions the survey shows. Respondents expect this to fall to less than 13% in the near future.
| What eFX clients want |
| Respondents’ breakdown of venue/format of FX execution |
|
Current average |
Expected average |
| Direct API: |
26.10% |
30.24% |
| MDP: |
41.09% |
38.80% |
| SDP: |
32.65% |
36.18% |
| Voice: |
17.91% |
12.77% |
| What is important in choosing an electronic venue? |
| Reasons for using multi-dealer platforms |
| Rank |
Reasons to use an MDP |
Score |
| 1 |
Narrower bid-offer spreads |
97 |
| 1 |
Demonstration of best execution |
97 |
| 3 |
Depth of book |
86 |
| 4 |
STP |
51 |
| 5 |
Internal execution policy requirement |
27 |
| 6 |
Anonymous trading |
26 |
| 7 |
Integrated workflow |
16 |
| Reasons for using single-dealer platforms |
| Rank |
Reasons to use an SDP |
Score |
| 1 |
Choice of counterparty/bank relationship |
124 |
| 2 |
Reliability/stability of platform |
77 |
| 3 |
Breadth of currencies |
70 |
| 4 |
STP/Integrated workflow |
46 |
| 5 |
Breadth of product algo tools/analytics/charting/online chat |
41 |
| 6 |
Pre-trade research |
17 |
| 7 |
Support/help desk |
16 |
| 8 |
Integrated workflow |
10 |
| Source: EuromoneyFXNews e-trading survey 2012 |
|
The results also show that customers are moving more electronic volume flow towards single-dealer platforms (SDPs), with their share of turnover expected to grow from 29% to 33% in the next two years.
