Several issues have been raised about the transparency of forex transactions, necessitating the need for technology companies to match changes in regulations and create solutions that fit in line with the expectations.
This comes at a time when regulators in various countries, from U.S. to New Zealand, have launched investigations into whether traders in banks colluded to fix benchmark rates at 4 p.m. London time. The probes have seen banks, which have also done their own in-house investigations, fire or suspend their traders across the globe.
Tech firm Molten Markets indicated that there is a huge demand for solutions that facilitate electronic trading at higher levels of transparency, enabling execution of transactions based on solid data. The company has developed what it terms as the only dedicated forex trading platform that is targeted for fund managers, the only one to be launched in 18 years.
The company said the first user of InstiFX is already live and conducting trades with their own chosen counterparties.
Each trade will be conducted through an embedded execution management system that is backed by a novel pre-trade analysis of execution options. Currently, the system is awaiting patent approval.
Molten Markets said that each trade can be executed with various counterparties using a wide variety of automated and manual trading techniques and is conveyed through real-time transactions cost analysis to show the best execution
“The move away from trading at benchmark fixing times is critically important,” said John Atchue, co-founder of Molten Markets in a statement.
“Long before the current investigations into “the Fix”, it was very clear to all market participants that the FX market is heavily distorted by the sheer size of transactions being accepted by banks as zero-revenue risk transfer trades at 4 pm London time. This was always unsustainable, but until now there has not been a reasonable alternative” added Atchue.
To contact the reporter of this story; Yashu Gola at Yashu@forexminute.com