The Finance Hive’s annual FX London meeting on Thursday 6th December brought representatives of 85 of the leading names in the buy-side community – including Allianz Global Investors, Fidelity, Goldman Sachs Asset Management, AXA Investment Managers, Prudential and Vanguard among others – for a frank and open discussion, where Chatham House rules applied. We also welcomed The Bank of England’s Executive Director for Markets, Andrew Hauser, who urged the buy-side audience to sign up to the Global Code of Conduct.
Attendees took part in several roundtable discussions throughout the day, covering a broad cross-section of relevant topics. Key issues included:
- Algos. While not new to the industry, there is still a divide between those who love and hate them. The balance between taking a ‘leap of faith’ to algorithmic trading and maintaining control with human interaction was much debated – but the importance of analysing and learning from each trade is always essential.
- Data. Its usefulness is undisputed – but to get true insight, a wide spread of trades is needed. This is where peer-to-peer interaction becomes important, but is so much transparency giving too much away to competitors?
- Transparency. Again, this divided opinion between Hive buy side members, with some feeling that transparency is a positive progression in the industry, and others feeling that it could kill competition.
- Liquidity. Liquidity options are changing. It’s crucial to develop methods on how to evaluate and have the tools to validate. At present, the buy-side are happy to let custodians do FX – but it is time to assess whether there is a better way.
Julie Nicolas, Managing Director, the Finance Hive, commented at the meeting: “It’s vital for the buy-side to have a voice in the industry and an opportunity to come together to discuss the issues that affect them. The Finance Hive is an important step towards this, creating a collaborative environment where FX buy-side professionals can debate peer-to-peer trading, liquidity, regulations, and identify necessary next steps as a community.”