In recent conversations with members of The Finance Hive, it became clear that the buy side are increasingly growing frustrated with banks taking advantage of the limited transparency and price discovery this causes in the NDF space. This is concerning as it raises the cost of trading, and means NDF execution is one of the most expensive aspects of the FX desks trading activity.
In order to access more transparency and data that can be used to hold banks to account, many of our buy side members are keen to increase the volume of trades they can move away from voice and chat, to RFS, streaming and algos. In the past years new technology solutions are coming to market which can drive efficiencies, and this is coinciding with increased electronic liquidity. As a result, larger trades can be executed electronically and less liquid pairs are catching up with the more commonly traded NDF currencies.
Considering these market challenges and the obvious opportunities for innovation that are available to the buy side, The Finance Hive recently partnered with BidFX to bring together a select group of senior FX leaders for an interactive discussion and brainstorming session. The Exploring NDF Electronification Report that was commissioned as a result of this session summarises the key takeaways from this roundtable discussion and features on the record commentary and examples from the roundtable participants.
The report includes on the record commentary from:
- Nowara Munir, FX Trader, Lazard Asset Management
- David Biser, Executive Director, Trading, Campbell and Company
- Paul Macchione, Director, Singapore Exchange (SGX)
- Scott Gold, Head of Sales for Americas, BidFX
- Daniel Chambers, Head of Data & Analytics, BidFX
This report specifically looks at:
- Workflow issues
- Using data to drive automation
- Making NDF algos a simpler and more useful tool
- Understanding and accessing streaming liquidity
NDF trading volume has increased over the years, and while it remains small compared to the spot market, the increased activity requires more transparency in pricing and better access to liquidity.
Having an EMS that actually looks at the depth of the market, gets real time NDF pricing, and can provide access to a market that a lot of traders still struggle to get full colour on is incredibly important!”
FX Trader, Lazard Asset Management
Register to read the full report!