FX Survey 2015: Methodology
The Euromoney FX Survey 2015 is the 37th annual survey of liquidity consumption within the global FX markets conducted by Euromoney magazine. Respondents were contacted by Euromoney from January 22nd to April 3rd 2015 with responses either collected via telephone or electronically at www.euromoney.com/fx2015. In total, Euromoney received 3,794 valid responses from consumers of FX liquidity representing total FX consumption of $123.6 trillion in calendar year 2014. The survey is split into two parts:
PART 1 – Quantitative
Respondents are asked to name their (up to) top 20 dealers by volume ($M) and the volume they traded with these providers through calendar year 2014. Respondents are asked to split their volumes between the three major product groups:
· Spot/forward outright
· Swaps (single leg)
· Options (notional value)
Respondents are then asked to split these volumes on a % basis by consumption channel (voice vs electronic) and to provide the % of their total FX trading volume for 2014 that was in emerging market (EM) currencies (where one currency of the pair is an EM currency).
Market share calculations
Each provider’s volume aggregated across all respondents (for example, the total volume of transactions attributed to XYZ Bank across all responses) is summed and then expressed as a % of the total transaction volume represented by all valid responses to arrive at their ALL FX PRODUCTS OVERALL MARKET SHARE.
All other market share calculations are arrived at by summing each providers aggregated volume across a particular: client type, client geography, product type or consumption channel.
PART 2 – Qualitative
This section is concerned with qualitative rankings of various aspects of the FX providers’ services. Respondents are asked to rate each provider they have assigned volumes to for a variety of customer service metrics, product areas, specific currency pairs or groups and ancillary services.
Quality rating calculations
In each category, for example G10 currency research, the ranking is calculated as the arithmetic mean of all the voted ratings (from 1 to 7 where 1 = very poor 7 = excellent) given to a bank for that category, with any responses that vote 1 in every voted category or which vote 7 in every voted category excluded.
To qualify in these categories, banks need to receive 5% of the total individual vote count in that category. Respondents who only respond with a volume figure for one bank in the counterparty section (ie single-banked) will not have their ratings included in the qualitative rankings.
In its surveying, Euromoney excluded responses deemed invalid for the below reasons – for the avoidance of doubt, the below exclusions apply to the ENTIRE submitted ballot:
1. Responses that do not include an annual total volume number for the respondent organization cannot count towards any of the rankings in the survey, including qualitative rankings, and are discarded.
2. Responses that do not satisfy the following minimum FX turnover threshold for qualification cannot count towards any of the rankings in the survey, including qualitative rankings, and are discarded:
· $20m in turnover for respondents from emerging market economies
· $50m in turnover for respondents from G10 economies
3. Captive votes and votes representing internal transaction flows are excluded in the survey. This includes votes cast by:
Private banks that are part of banking groups with a market-making FX business
Internal bank treasuries
FX and non-FX trading desks
Additionally, votes are not included in the survey where:
FX service providers cast votes for themselves
Euromoney does not receive confirmation from the respondent of their identity
An individual respondent submits more than one ballot and we cannot resolve the duplication
A respondent’s volume is duplicating that of a colleagues from the same institution
We receive interbank or interdealer broking volumes
Changes to survey process & methodology for 2015 versus prior years
All respondents to the Euromoney FX Survey 2015 were contacted directly by Euromoney via either telephone or email. The Euromoney FX survey 2015 was the first Euromoney FX Survey that FX providers were explicitly barred from contacting potential respondents during the survey field dates regarding the survey. In previous years, Euromoney did not regulate the actions of FX providers whilst the survey was in the field.
All respondents were made aware of these new rules and actively encouraged to inform Euromoney of any breaches made by providers. Euromoney made clear to all FX providers before the survey field dates that it would use a range of sanctions against FX providers that contravened these rules, including the removal of a provider from the survey in its entirety.
Euromoney did not receive any feedback from respondents of FX providers contravening these rules and hence no sanctions were taken against any FX provider.
Due to this change of survey process, the Euromoney FX Survey 2015 has a smaller response base and liquidity pool than previous years. However, Euromoney believes that the survey population remains:
· The most accurate representation of the wholesale FX consumption universe available
· A representative sample of FX consumption volumes
· The most accurate depiction of market shares for FX providers in aggregate
Due to the smaller liquidity pool in Euromoney FX Survey 2015, comparisons of notional volumes with previous years might not be valid. However, Euromoney believes that due to the representative samples achieved in Euromoney FX Survey 2015 and previous surveys, that time series comparisons of aggregate market shares, proportionate volume distributions and proportionate product distributions remain valid.