Saxo Bank has strengthened its prime of prime (PoP) offering for its global institutional clients. This includes the support of dedicated infrastructure DMA liquidity hubs in London and New York. The development follows strong client demand for larger executing sizes, helping foster more efficiency for full amount execution.
The development has been a long time coming, with Saxo Bank gradually building out its PoP offering and business on a global scale. In particular, demand for this service has been driven by growth in small to mid-sized institutional clients turning to Saxo Bank for direct market access (DMA) and liquidity optimization services.
Lucian Lauerman, Global Head of Electronic Distribution, commented exclusively to Finance Magnates: “Our full amount liquidity is something we have been working on for some time. It has become obvious that as our prime of prime business grows, we have clients that are occasionally or more regularly executing larger sizes and would greatly benefit from access to a different type of liquidity.”
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Tapping into NY4 and LD4 in New York and London respectively represents an important stroke for Saxo Bank. Overall, the move will help support improved full amount execution, while ensuring a better trade experience and lower market impact for large orders in FX and precious metals.
Indeed, “Placing orders in full amount with one LP will reduce market impact. Clients stand to benefit from better pricing, due to decreased slippage from fewer rejections. At the same time it became obvious we needed new architecture that sat alongside our current infrastructure but devoted completely to full amount execution – with bespoke liquidity feeds and a platform scaled to perform,” added Mr. Lauerman.
The move is expected to accommodate a range of liquidity providers and clients, with an emphasis on clients with larger orders. “As liquidity providers increasingly shorten last look periods and the market moves to an environment with faster response times, I think full amount liquidity will be priced a lot more competitively in size than sweepable liquidity,” explained Christian Thomsen, an FX liquidity manager at Saxo Bank, exclusively to Finance Magnates.
“This is already the case for orders in sizes of 10 million or greater, and I would expect that trend to continue. We feel this initiative accommodates both clients and LPs,” he noted.