19 October 2017
Paul Blank

e-Trading thoughts

Paul Blank - TradAir

30Posts 156,287Views 1Comments
Finance 2.0

Finance 2.0

A community for discussing the application of Web 2.0 technologies to financial services.

eFX volumes Single Dealer vs Multi Dealer Platforms

12 May 2010  |  7116 views  |  1

Research by Greenwich Associates (released in March 2010) states that around the world, multi-bank electronic trading platforms captured about 40% of overall FX trading volume in 2008-2009 and single-bank platforms captured another 15%.

However, the two most authoritative sources of actual empirical data on FX activity, namely the Bank of England (BoE) and the Bank of International Settlements (BIS) seem to paint a very different picture!

Bank of England (BoE): Empirical data released by the Bank of England (Oct 2009), covering FX activity between reporting dealers and clients in London (the largest global FX market), shows that single dealer platforms (SDPs) accounted for 25% of all electronic FX volume, compared with only 13% of electronic volume done through multi-dealer platforms (MDPs) - see chart below.

Bank of International Settlements (BIS): The most definitive empirical data on global FX volumes is produced every three years by the BIS in their Triennial survey. Data from the 2007 triennial survey shows a similar picture to the BoE data. Whilst electronic trading accunted for some 34% of all global daily FX volumes, nearly 30% of all etrading was executed through SDPs, compared with only 21% of etrading executed through MDPs.  - see chart below.

The 2010 Triennial Central Bank Survey of FX activity will be released in August, and should prove fascinating reading in terms of the latest trends.

Top chart Daily London eFX volumes by SDP and MDP (BofE -2009)

Bottom chart:Daily Global eFX volumes by SDP and MDP (BIS-2007)

 

a member-uploaded image TagsTrade execution

Comments: (2)

David Woolcock
David Woolcock - Eurobase Banking Solutions - London | 14 May, 2010, 09:02

For this to be properly understood you would need to compare the exact definitions of MDP used in each of the surveys.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Paul Blank
Paul Blank - TradAir - London | 14 May, 2010, 10:24

Hi David,

I don’t have access to the full Greenwich survey, so cannot comment on how they break down the catagories, and was anyway only commenting on the ‘teaser’ article they published.

But the full BIS Triennial survey is freely available, and their methodology (pg 44) has a category of FX execution method called “Electronic Trading Systems”, which is defines as “Executed via a single-bank proprietary platform (SDP) or a multi-bank dealing system (MDP) – and of course, includes FXAll along with Currenex and FXConnect. Another category of electronic method is Electronic Broking Systems, which covers EBS and Reuters Matching.

Within the BIS survey summary (here), it states that electronic methods of execution accounted for 34% of all FX trading (across spot, fwds, swaps and options), of which:

Broking Systems= 17%
Multibank Trading Systems (MDPs) = 7%
Single Bank Trading Systems (SDPs) =10%

Total Electronic Trading = 34%

So, that would mean that SDPs account for nearly 30% of all electronic trading, whilst MDPs accounted for 21%.

I could provide a similar breakdown of the Bank of England data if needed. As I said, it will be interesting to see what the 2010 BIS survey results will show!

Regards

Paul

 

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Latest posts from Paul

Talk of ICE exchange to buy FX platform Fastmatch

20 July 2015  |  6832 views  |  0 comments | recomends Recommends 0 TagsTrade executionWholesale banking

Why SDPs should provide TCA tools for buy-side clients

13 July 2015  |  2947 views  |  0 comments | recomends Recommends 0 TagsTrade executionWholesale banking

Review of major FX Platforms volumes for June 2015

12 July 2015  |  3121 views  |  0 comments | recomends Recommends 0 TagsTrade executionWholesale banking

Paul's profile

job title e-Trading Solutions
location London
member since 2007
Summary profile See full profile »
Commentator on all aspects of developments around eTrading solutions for banks, looking at the business needs and real-world trading problems of clients. Typically our clients are banks, and trad...

Paul's expertise

Member since 2007
29 posts1 comments
What Paul reads
Singledealerplatforms.org

Who's commenting on Paul's posts