In a joint statement, publicly traded First Derivatives and Fair Trading Technology (FTT) have announced the launch of a new end-to-end solution for retail forex brokers. The solution uses FTT’s middle and front-end trading services including its T3 Hub, MetaTrader 4 servers and broker tools, combined with First Derivatives Delta Flow back-end platform. Delta Flow will be responsible for providing services such as connectivity to liquidity sources, aggregation, price spreading, risk and credit management.
As an end-to-end solution, the product will provide brokers front-end trading technology to provide to their clients, risk management tools, as well as liquidity capabilities to support both market making and straight through processing of trades. Both FTT and First Derivatives are expected to market the joint solution to their existing respective client bases.
According to the two firms, the new solution is coming to market with a Japanese broker and London based prime broker implementing portions of the offering. For this initial implementation, FTT developed an interface for the connected services with the two firms hosting their own technology but both being collocated in Tokyo.
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Commenting about the joint solution, First Derivatives Managing Director John Beckert stated, “FD is pleased to be working with FTT to integrate their strong front and middle office service components into Delta Flow’s open architecture. The integration of these two compatible, best of breed services offers financial services firms a strong end to end solution.”
Adding to the comment, Fair Trading Technology COO Finn Jakobsen stated, “We are excited about the cooperation with First Derivatives. We are widening our product portfolio dramatically, and can now provide an advanced full-scale trading solution to bank and brokerages at competitive pricing, and we are doing this in cooperation with an esteemed company with a long history. We see a lot of potential in this.”
While financial considerations of the deal were not made public, for FTT the joint venture marks an achievement for the technology provider overall, which experienced turnover in its staff in 2014. A provider of dynamic data analysis through its Delta Flow product, the First Derivatives back-end product is already in use by brokers for handling and redistributing liquidity.
Being able to offer brokers the ability to both automatically hedge their order flow and dynamically change spreads when markets become more volatile, the combined solution launches at an appropriate time. As the industry has been reviewing just how safe the simple agency model is, following the Swiss franc volatility earlier this month that triggered huge losses at many brokers, firms are expected to become more interested in warehousing risk internally.