GFI considering allowing hedge funds on to its options platform
Colin Heffron, president of GFI, has confirmed market rumours that the company is considering opening up its ForexMatch option trading screen to hedge funds. However, he has declined to put a date on this, saying that there are various technological and business flow issues, such as STP and possibly prime brokerage allocations, to address. Heffron also says GFI has yet to finish sounding out and receiving feedback from clients.
“We’re discussing with our clients about opening up ForexMatch to some of the big, liquidity-providing hedge funds. Some customers have asked us to work with them, as there’s a certain inevitability that if we don’t get some of the larger hedge funds involved, they will migrate to an exchange-traded market. The CME is a threat and rather than have a platform where liquidity can be hoovered up, we’d rather create one which brings liquidity in,” says Heffron.
The decision has inevitably generated debate in the industry. It is well known that other brokers have also considered opening up to hedge funds but have shied away in the face of perceived opposition from the big sell-side players, especially those with a strong presence in hedge fund sales.