FX Survey 2016: Methodology
The Euromoney FX Survey 2016 is our 38th annual survey of liquidity consumption in the global FX markets.
Euromoney contacted respondents between January 21 and mid-April 2016 and collected responses securely via telephone and a dedicated data collection website.
In total we received 3435 valid responses from consumers of FX liquidity, representing total FX consumption of $95 trillion in the calendar year 2015.
Euromoney’s FX survey continues to be the most comprehensive representation of the wholesale FX consumption universe; a representative sample of FX consumption volumes; and is the most accurate depiction of market shares for FX providers in aggregate.
Regional figures show the global reach of the survey. With 951 respondents in Western Europe, 415 in North America, 771 in Asia, 171 in the Middle East and Africa, 585 in Central and Eastern Europe, 255 in Latin America and 287 in Australasia.
The survey is split into two parts. For the quantitative sections respondents are asked to name their (up to) top 20 dealers by volume ($m) and the volume they traded with these providers in 2015.
Respondents are asked to split their volumes between the three main product groups: spot/forward outright, swaps (single leg) and options (notional value).
Respondents are then asked to split these volumes on a percentage basis by consumption channel (voice versus electronic) and to provide the percentage of their total FX trading volume for 2015 that was in emerging market currencies (where one currency of the pair is an EM currency).
Clients may vote for bank and/or for non-bank liquidity providers.
Each provider’s volume aggregated across all respondents (for example, the total volume of transactions attributed to XYZ Bank across all responses) is summed up and expressed as a percentage 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 up each provider’s aggregated volume across a particular client type, client geography, product type or consumption channel.
The second section of the survey is qualitative and produces 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 and ancillary services.
In each category, for example, flow research, the ranking is calculated as the arithmetic mean of all the voted ratings (from one to seven where one = very poor, seven = excellent) given to a bank for that category, with any responses that vote one in every voted category or which vote seven 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 (i.e. single-banked) will not have their ratings included in the qualitative rankings.
Euromoney excludes responses deemed invalid for the following 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. 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 colleague’s from the same institution.
We receive interbank or interdealer broking volumes
Survey process and methodology
All respondents will be ringfenced from banks during the ‘live’ survey field dates. Institutions must not market the survey to their clients during the survey dates.
If an institution does contact a respondent client during the survey process to canvass votes in the survey, then the client reserves the right to strike off that institution from its survey roster. At this stage Euromoney would also investigate that institution and client sector to see if the client chasing has been more widespread and whether further action needs to be taken. Euromoney reserves the right to implement sanctions — from withdrawing specific volumes involved in the transgression or completely withdrawing the institution from the survey.
Institutions can submit client lists.
Volume must be split by:
Non-swap volume: incorporating spot and forward outrights
Swap volume: incorporating swap/forward roll volumes and only counting one leg of each swap transaction.
Options volume: Vanilla options volumes on a notional basis (when the market share tables are calculated we will use a delta equivalent reduction on the notional volumes. Banks will be asked to give a delta figure for corporates and financial institutions. Euromoney will average these figures to give a uniform delta value for the notional volumes for corporates and financial institutions.
Cross-currency swaps of duration greater than one year and rates products as a whole are not part of this volume
Swaps are single-leg counted. Outrights such as long-dated forwards are included in the survey regardless of maturity.