FOREIGN EXCHANGE
How do you see your dedicated FX
trading function contributing to the
overall investment process and client
satisfaction for Insight Investment?
We deliver a market leading execution
service that minimises market impact,
by only interacting with liquidity
providers who behave in a way which
does not leak information.
How do you foresee the trading
technology landscape, with a few
incumbent brands, shifting in the
coming years? What will be the focus
areas?
this and delivering improvements
to the investment process to deliver
added value.
As we already know, much of the FX
trading in the industry is uncleared
OTC derivatives operating in
an opaque market today. What
developments do you anticipate or
think is needed in the next years?
As has been the case for a few years
now, the focus area will remain the
availability and quality of execution
data. As an industry we need to
A continuation of the developments in
liquidity provider execution analysis.
As an industry we need to
improve our access to execution
data and make changes to allow
the data to be standardised
Richard at the 9 th ATF FX London
We believe that we access the market
for our clients at a minimal cost. We
use our execution expertise as a
feedback to the pre-trade decision to
compliment the overall investment
process.
What is the rationale for FX traders to
trade with FX trading algorithms, are
they robust and do they consistently
deliver better results?
FX trading algorithms deliver quick,
transparent and auditable execution in
the market place. We believe that we
satisfy our Best Execution regulatory
requirements by utilising algorithms.
Algorithms allow quick access to the
market with transparent fill data. Voice
trading can NOT deliver the same
degree of auditable transparency. We
have an algorithmic trading policy
which delivers evidential results, which
allow us to prove that our method of
execution is robust. The policy allows us
to challenge our executions to ensure
that the results we are delivering are
consistently good.
32
improve our access to execution data
and make changes to allow the data to
be standardised. We need to be able
expand the data collection universe
and will lean on vendors/brands who
are capable of delivering analytics on
this data. The emergence of Artificial
Intelligence and Machine Learning
to satisfy these analytics is currently
unproven and I would expect that this
will be an area of focus in helping to
deliver useful trade analytics.
As trading in general moves towards
more automation, in which ways do
you think this will affect a FX traders’
role?
Automated trading via Execution
Management Systems will become the
norm and I think the FX trader’s role
will be one akin to flying a plane on
autopilot. The trader will be overseeing
the whole investment execution
process and will try to add value
holistically. Automation will allow easier
capture of exceptions and the trader
will focus more of his time in managing
www.buysideintel.com
I would like to see the industry improve
its transparency around rejection
codes, type of liquidity, cross currency
liquidity and last look. Insight is a
supporter of the FX Global Code and I
would like to see greater uptake from
our peers on the buyside in signing it.
I think this would enable the industry
to move forward as a group and allow
us to formalise our achievements and
targets for a better FX market place.
As electronic liquidity providers
are gaining the buy side’s trust and
momentum across the industry, how
do you see the FX counterparty list
evolving over the next years?
I think that a reduced core of electronic
liquidity providers will exist in the
future specialising in particular
currencies. The best liquidity providers
will be white labelled for banks or
other liquidity providers, enabling the
utilisation of bank balance sheets for
non-PB relationships. The PB model
may grow to facilitate this move
towards a core group of liquidity
providers.
Summer 2019