Technology provider Caplin Systems has today announced the launch of a hosted and managed e-distribution service for institutional FX participants.
Aimed largely at the banking sector, the new service has been released under the designation of Caplin Direct, and according to the company is intended to enable banks looking to implement a web-based FX single dealer platform (SDP) to connect directly with their institutional customers, at what Caplin Systems considers to be a fraction of the time and cost of an in-house build.
Single-Dealer Platforms Still Omnipresent Among Banks?
Whether banks see the commercial benefit in investing in the development and implementation of multi-dealer platforms (MDPs) is perhaps a moot point among trading desks on both sides of the Atlantic, as highlighted at a panel discussion in July this year at which Forex Magnates was present.
During the discussion, the subject of whether, in the context of the rulings set forth by the Dodd-Frank Act by which institutional FX firms in North America are bound, the continued investment in such MDPs is worthwhile.
At that time, Jacqueline Liau, Global head of FXPB & Asia Pacific Head of eFX at HSBC asserted that, “A lot of banks have spent a vast amount of time and energy on MDPs but they cling on to SDPs as a way to link into their clients.”
“The SDP platforms will have to evolve, including smart order routers so that they can send the order into a SEF or other SDPs, and they should offer algorithmic trading so that traders can access multiple SEFs”
“We are going to see a rise in the quality of platforms from banks. It is not going to be so much about speed and latency, I think there are a lot of other services which need to be set into SDPs, meanwhile we cannot afford to ignore MDPs,” she stated.
In this particular case, Ms. Liau’s foresight in July into the technological path that would be taken can be considered correct, as Caplin Systems’ rationale behind the launch of Caplin Direct is that it is designed for banks that want a modern FX SDP, but have previously been held back by the cost and technical challenges involved.
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Once connected to a trading system, the idea is that Caplin Direct provides an ‘out of the box’ SDP, while providing unlimited scope for branding, customization and extension with unique features and workflows.
Reduction In Pre-Implementation Time
A facet which Caplin Systems considers to be of importance is the ability to reduce the time taken for a bank to bring an FX trading system to market.
The new service, according to the company, connects quickly and easily to existing e-trading systems, whether vendor-hosted or deployed in order to allow banks to implement an FX trading system within a matter of weeks. To speed the process still further, Caplin offers standard adapters for many popular trading systems.
“We have long been the solution of choice for banks wanting to build and host their own SDPs,” stated Paul Caplin, CEO of Caplin Systems on behalf of his firm.
“We continue to enthusiastically serve and support larger banks that are looking for a technology stack that they can deploy and customize themselves. But with Caplin Direct, we are now able to cater for the many banks that would prefer a managed service that just works.”
“We are already in talks with regional banks around the world about using the new service,” added Adam Hawley, Commercial Director of Caplin Systems.
“The fact that Caplin Direct is built on the same Caplin technology used by Citi, whose Velocity offering was recently voted the world’s top FX single-dealer platform, means that banks can absolutely trust the reliability and security of the technology and rely on us to minimize the time, costs and risks involved in building a high performance single-dealer platform,” concluded Mr. Hawley.