Shining a light on opaque market data packages
Is there a need for greater transparency in market data pricing? A group of 24 trading institutions, including banks and asset managers, certainly think so.
Shining a Light on Opaque Market Data Packages*†
By Roger Rutherford, COO, ParFX. Opaque market data pricing models, accompanied by unsustainable cost increases, have become a harsh reality of financial markets. This creates a multiple-tier market, compromising the ability of institutions with less financial resources to operate on an equal playing field or measure whether they are getting value for their money.
Taking the first steps towards a new market structure*
“The execution principles and agreements that liquidity providers had in place with customers prior to the FX Global Code being published – many of them have already changed. We’ve already seen a difference in the market already. Some execution agreements have explicitly stated they will not use the information within the last look window for trading, and others have moved to zero hold time so participants can’t use that information to pre-hedge,” says Roger Rutherford, Chief Operating Officer at ParFX and ACI FX committee member.
Forex rule book closes window on ‘last look’ practice*†
Roger Rutherford, chief operating officer at ParFX, the trading venue, said the revised language “provided clear guidance”. “The code has been instrumental in kick-starting important conversations around market behaviour, ethics and transparency. I think 2018 will be a key year in which to redefine the rules in FX,” he added.
Positive global growth to drive currencies in 2018*
Roger Rutherford, chief operating officer at trading platform, ParFX says 2018 will be a key year to redefine the rules in foreign exchange. Rutherford says: “It is clear that the code is shining a light on areas of the market that have long been overdue for review. Equality, transparency and market conduct have emerged as key industry themes which I feel will continue to dominate discussions over the next year and beyond.”
GFXC Revises Last Look Section of the FX Global Code of Conduct*
Commenting on the announcement, the Chief Operating Officer at ParFX, Roger Rutherford, added: “We welcome the revised guidance by the GFXC relating to last look in FX. It is clear there is scope for misconduct to occur if trade information gained during the last look window is utilized by the liquidity provider to execute a trade, for example, or if the liquidity provider always intended to reject the trade to learn more about a counterparty’s position in the market.”
Global Foreign Exchange Committee (GFXC) publishes revised last look guidance*
Roger Rutherford, Chief Operating Officer at ParFX, commented: We welcome the revised guidance by the GFXC relating to last look in FX. It is clear there is scope for misconduct to occur if trade information gained during the last look window is utilised by the liquidity provider to execute a trade, for example, or if the liquidity provider always intended to reject the trade in order to learn more about a counterparty’s position in the market. Such behaviour does not conform with the letter and spirit of the FX Global Code, and the revised language provides clear guidance in this respect.
FX: Stemming the tide of rising data costs*†
ParFX chief operating officer Roger Rutherford describes market data fees in spot FX as one of the most opaque areas of trading, suggesting that many platform providers offer special deals to those with the deepest pockets and different cost packages that are dependent on customers’ style of trading or overall volumes traded.
Plugging the gap*†
As Roger Rutherford, COO of ParFX, explains, for a long time, tier one banks dominated the prime brokerage space and were a key source of credit for the non-bank trading community. However regulation, capital requirement and shrinking profit margins for banks resulted in the prime brokerage market undergoing enormous change in recent years.
High-frequency trading shifts from speed back to strategy
Faced with diminishing marginal returns and exponential cost increases, electronic high-frequency trading firms that made their fortunes by focusing on low-latency trading strategies are now turning their attention to analytics and smarter trading initiatives in a drive to maintain their competitive advantage.