If, as many predict, the future of trading and investment is multi-asset, it would seem that a lot of successful platforms will struggle to survive. However, reports of their imminent demise will almost certainly prove premature for several reasons. The first is that while much is made of multi-asset trading, the reality is that most traders, whether on the buy side or sell side, tend to specialize in one product class. It is not as if they walk into their trading rooms, notice that foreign exchange is quiet and so start punting around in equities and fixed income.
This alone might be enough to ensure that good, solid single-asset platforms will continue to thrive. Another issue is that off-the-shelf multi-asset systems might well prove to be Jacks of all trades, lacking the specific functionality that is required by specialist traders.
Of course, there is some natural demand for multi-asset platforms, but what is more likely to drive their development and uptake is the desire for institutions to gain cost efficiencies across their business areas. Ripping out three or four different platforms and replacing them with one would appear to have an obvious appeal.
However, as is shown by a recent agreement between FXall and Investment Technology Group, a well-established and successful provider of equity trading services, multi-asset platforms can be created virtually, which in theory allows end users to choose the best-of-breed solution they, and not the vendor, want.
The deal between FXall and ITG basically puts each others terminals in front of the two companys client bases. In its initial phase, ITG will connect FXalls relationship-trading platform into its order management system, Macgregor XIP and execution management system Triton. This will enable ITGs clients to hedge or trade around any foreign exchange exposure they have as a result of their equity business.
"We are delighted to have partnered with ITG. We are confident that we make a formidable team, offering cutting-edge trading solutions to clients in an increasingly complex market," says Phil Weisberg, FXalls chief executive. "FXall is committed to providing products that meet the diverse needs of market participants and our deep liquidity and advanced technology make us a natural choice for FX trading in todays market."