Saxo Bank has announced the launch of Saxo Prime, a FX Prime Brokerage service for institutional clients. Saxo Prime offers users direct market access (DMA) to FX liquidity providers and venues. The Prime Brokerage offering is built on technology and algorithmic trading provider MarketFactory’s FX Aggregator (the entire press release is provided below).
To learn more about the Saxo Prime and the Saxo/MarketFactory partnership, Forex Magnates spoke to Lucian Lauerman, Head of API Business at Saxo Bank and Darren Jer, Sales & Business Development at MarketFactory.
FM: Why did Saxo Bank decide to choose to stream liquidity for its clients from MarketFactory?
Lauerman: We are using a 3rd party infrastructure as we felt it was important to be able to demonstrate to clients the independence from Saxo’s market making infrastructure of the FX agency solution we are introducing. MarketFactory specializes in very low latency collocated connectivity. Saxo chose to partner with MarketFactory based on the strength of their low latency technical infrastructure, but also because of their experience they have in the FX market structure and the features of the various liquidity pools that our clients want to access.
FM : How does this partnership affect Saxo’s current institutional offering of aggregated Tier 1 liquidity. Will it replace the existing product or will it be in addition?
Lauerman: Saxo Prime is an agency offering that sits alongside our Saxo Direct multi asset liquidity API. Saxo Bank’s market made liquidity API is stable, reliable and competitively priced, and can give our clients a cross asset offering. We have seen a large amount of growth in our CFD and Futures liquidity via the Saxo Direct API, with many brokers looking to Saxo for liquidity to offer their clients. This means that going forward that institutional FX clients can choose to trade with Saxo as principle or as agent.
FM: Will the relationship with MarketFactory allow Saxo to target new clients that the bank was unable to with the existing Saxo institutional offering?
Lauerman: Yes, for example we have clients who are looking to market make on the FX ECN’s, and need a Prime relationship to do so. Or they are looking for DMA to a pool of aggregated liquidity. A single MarketFactory API connection gives users flexibility to explore and choose which managed or custom liquidity pool, or ECN combination, is best for them. Users connect once and choose the best fit, without the need for re-plumbing.
Jer: We’re happily last to market — last and best. Saxo Prime is the result of years of research by MarketFactory and Saxo Bank, analyzing customer needs, and studying how others have approached this market. We know where all the upfront costs have been discouraging entire customer segments and are eliminating them. We know where our competitors claim tight spreads that actually result in massive amounts of long-term slippage to customers. Better than anyone else, we know about differentiating flow for our liquidity providers so that they’re able to earn good yields on our business and pass on better prices to our broking customers. What’s been missing from this part of the market is greater transparency and integrity, and we want to provide it.
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FM: Are there any spread or fee changes involved for existing clients that migrate to the MarketFactory liquidity?
Lauerman: We see this as area of new client activity rather than a migration path for our existing institutional API business. As for the fees involved, there are a wide range of services offered under Saxo Prime – clients can access ECN’s of pools or bank or non-bank liquidity; clients can be PB’d by Saxo, or can have their own PB relationship and make use of give up agreements, etc. We’re very aware of the pricing of similar services in the market and are confident we can a) provide a true one-stop shop — unlike anyone else, and b) offer higher quality liquidity to market participants at lower total execution costs than they’re currently paying.
Hellerup, 16 January, 2013
Saxo Bank launches Saxo Prime to provide FX Prime Brokerage for institutional clients
Saxo Bank, the multi-asset online trading and investment specialist, today announces the launch of Saxo Prime, its new FX Prime Brokerage solution, offering institutional clients direct market access (DMA) to major FX liquidity providers and venues worldwide. Saxo Prime combines prime brokerage functionality from Saxo Bank with market-leading connectivity from MarketFactory, a provider of low latency algorithmic trading software and hosted co-location services.
Saxo Prime expands Saxo Bank’s product offering for asset managers, retail brokers and proprietary trading firms by offering FX DMA. Saxo Direct, the API (Application Programming Interface) connectivity solution, provides access to Saxo Bank’s own high quality cross-asset liquidity.
Saxo Prime’s DMA functionality is built on MarketFactory’s FX Aggregator [Trading Gateway], providing a single Application Programming Interface (API) for normalised connectivity to major market making banks and Currency Electronic Communication Networks (ECN). Saxo Bank’s clients are not exposed to changes, updates or access agreement across various feeds, and the API preserves the features of each venue, delivering continuous connectivity.
Lucian Lauerman, Head of API Business at Saxo Bank, says:
“With Saxo Prime and DMA, we enable our institutional clients to easily and efficiently tap into the major liquidity venues. Saxo Prime gives our clients direct access to the liquidity pools that power the FX markets, from a range of ECNs or to pools of tier one bank liquidity. MarketFactory is a leading provider of low latency connectivity in the FX space, with an excellent technical solution as well as an impressive track record of delivery. The team’s experience and dedication will help us further expand our state-of-the-art offering to our clients, and offer them unparalleled access to liquidity. Saxo Prime combines direct connectivity with access agreements and credit intermediation where needed, meaning a wider range of clients can directly and easily access these venues.”
Saxo Prime is available from 23 January 2013 for Saxo Bank’s institutional clients worldwide. Client inquiries should go to email@example.com.
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About Saxo Bank
Saxo Bank is a leading online trading and investment specialist, offering private investors and institutional clients a complete set of tools for their trading and investment strategies. A fully licensed and regulated European bank, Saxo Bank enables clients to trade FX, CFDs, ETFs, Stocks, Futures, Options and other derivatives via three specialised and fully integrated multi-asset trading platforms; the browser-based SaxoWebTrader, the downloadable SaxoTrader and the SaxoMobileTrader application. The platforms are available in over 20 languages and are white-labelled by more than 100 major financial institutions worldwide. Saxo Bank also offers professional portfolio and fund management as well as traditional banking services through Saxo Privatbank. Founded in 1992, the Saxo Bank Group is headquartered in Copenhagen with 25 local offices throughout Europe, Asia, Middle East, Latin America and Australia.