Venue fragmentation set to continue, says FX veteran
MarketFactory chairman James Sinclair sets out the reasons why FX liquidity could fragment further, in a new white paper.
Fragmentation of foreign-exchange liquidity has increased during the past five years and is set to persist as platform innovation continues and the market structure favours a growing number of trading venues, according to a new industry white paper.
Author James Sinclair, executive chairman and co-founder of FX trading technology provider MarketFactory, believes the proliferation of venues has been inevitable since the launch of ParFX, a bank-backed currencies platform hosted by interdealer broker Tradition that began trading in 2013. The launch of ParFX coincided with a number of other new initiatives, each with a unique strategy to attract and maintain liquidity.
Though some platforms have been more successful than others, FX trading is no longer restricted to a small selection of venues.