K&KGC
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K E Y F I N D I N G S F R O M 6 TH AT F G L O B A L S U M M I T
FX buy-side traders
are now looking at taking
trading to the next level
T
he Alpha Trader Forum Foreign Exchange
regularly attracts the cutting edge buy-side
thought leaders of foreign exchange trading.
With MiFID II now being live, the traders are
planning to take their trading to the next level
with the expectation that internal resources will be re-
allocated in the best interest of their clients rather than
regulatory remediation.
Over 57% of the FX buy side traders who attended the
Global Summit now already use FX trading algorithms
and another 20% are now planning to trade with FX
trading algorithms.
There are still market efficiency challenges, especially
in the Swap and Forward market and the buy-side are
now in agreement that electronic all-to-all trading
initiatives are now needed for this part of the FX market.
K&KGC has historically assisted the fixed income buy-
side head traders with consolidating th eir specifications
and requirements for electronic all-to-all bond trading
with the Alpha Trader Forum since 2013. K&KGC is now
prepared to assist the foreign exchange buy-side head
traders and other market participants to take foreign
exchange trading to the next level to eliminate the
inefficiencies in this market. Futures is an alternative
solution suitable for some buy-side head traders which
was also discussed at the ATF Global Summit. FX Options
is another area that is still to a large extent traded over
voice but there are already solutions in the market to
trade these electronically.
Best execution and top 5 venue reporting is part of
every buy-side’s priority list. The key focus will be around
accessing better real-time data for more informed
decision making.
The implementation of MiFID II did not have any
detrimental impact on the overall FX liquidity. The main
complaints were about operational challenges with
third party systems. There are still remaining reporting
challenges around time stamping and standardisation
among the counterparties of the appropriate tagging of
orders. Many continental European buy-side firms have
made an effort throughout 2017 to register their funds
under the UCITS regime to avoid the necessity for trade
and transaction reporting.
The GFXC update of Principle 17 in the FX Global Code in
December 2017 was well received by the buy side. There
is a general interest among the buy side to implement
the Global Code within their firms even if it is not a
regulatory requirement.
The next Alpha Trader Forum Foreign Exchange
is 7 th June 2018 in London.
6
Spring 2018
www.buysideintel.com
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