Foreign eXchange Consulting Services International (FXCSI), has announced a post-trade FX Transition Cost Analysis Tool that allows users to generate their own FX transaction cost analysis (TCA) reporting. Once again, this offering underscores the heightened demand for TCA and the greater insight and transparency that is required in the market place today. Allegations of FX pricing irregularities by custody banks BNY Mellon and State Street brought attention to a corner of the FX market that has long been in the spotlight in the equities space. In addition, simple market dynamics and economics are catalysts as declining volumes, reduced margins and a changing competitive landscape put more pressure on both the buy- and sell side to identify any and all areas of cost reduction, profitability enhancement and margin improvement. As a result, firms such as ITG, TradingScreen, FXall and several others have responded with TCA offerings focused on the FX market.
“The goal of our product is to provide an easy-to-use service to support both the Buy-Side and Sell-Side of the FX market. We have created a tool that can be used for sales, marketing, client segmentation, supplier selection, performance measurement and compliance. We, at FXCSI, do not consult on the quality of the FX pricing, as we are, in no way, exposed to the supplier-client relationship; rather the role of FXCSI is to report independently on the FX cost to benchmark, irrespective of our user’s role in the FX market”, says FXCSI VP, Product Development, Mark VanRoon.
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In its release the company stated that “ FXCSI`s application allows users to create their own hierarchy complete with currency translations for the purpose of consolidated reporting at any node of interest in the enterprise. Using a proprietary method unique to the product, FXCSI is able to benchmark execution ‘time windows’, a common practice among custodians. In addition to this, the FXCSI application ‘vectors’ benchmark measurement by transaction size and currency pair to provide a comprehensive profile of transaction cost. This is particularly helpful for custodians and real money managers alike.”
The product is scheduled to finalize alpha testing by November 30, 2012 and be beta-released on December 1, 2012.