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FOREIGN EXCHANGE

Electronic trading on the up since Mifid II – JPMorgan

JPMorgan’s annual institutional e-trading survey shows rising appetite for mobile trading, but growth in algo execution has been slower than anticipated.

Trading through electronic trading platforms has surged since the recast Markets in Financial Instruments Directive (Mifid II) came into force on January 3, according to officials at JPMorgan, dampening concerns that the new rulebook might cause trading of in-scope instruments to slow down.

Scott-Wacker-160x186

Scott Wacker,
JPMorgan
 

“In some ways it is not surprising that electronic trading is rising so sharply, given the products that are now in scope of Mifid II,” says Scott Wacker, global head of e-commerce sales and marketing at JPMorgan. “The stronger requirements for transparency, reporting and recording of information are mostly done for you if trading on an electronic portal.”

Although still too early to draw definite conclusions, Wacker says the bank has seen a measurable increase in electronic trading of in-scope foreign-exchange instruments, including swaps, forwards, options and non-deliverable forwards.

This might also be driven by a more volatile macro environment in recent weeks, stemming from the US tax reforms and talk of interest-rate movements in Japan and Europe.

“We saw marked growth in our spot business during the first three weeks of the year versus the past three years, driven by the macro environment, and rising daily volumes on electronic channels in other products as Mifid II drives lasting changes in the FX market,” says Wacker.