If there is one particular asset class that can be singled out as a generator of increasing volumes during the latter half of 2013, it is FX Options.
As FX trading volumes began to dwindle from, in the case of many companies internationally, all-time highs as 2013 headed towards its twilight months, certain companies in the retail and institutional sectors in North America majored on this niche instrument.
Today, Interactive Data has announced that it is expanding its global OTC presence by entering into a collaboration with US brokerage firm BGC Partners, painting a picture that companies in the United States are indeed prepared to increase their coverage of FX Options.
In this particular case, the company cites its ability to meet regulatory demands as being a major factor.
BGC Partners provides a series of investment environments, some of which are unrelated to the electronic trading business whatsoever, but the company does provide FX Options, equities, commodities and futures on a wholesale basis.
Accessibility of Data
According to Interactive Data, participants in the OTC markets are faced with increasing regulatory demands that are driving the need for enhanced transparency and market prices. Indeed, the Dodd-Frank Act requires a stringent set of trade reporting procedures to be adhered to by market participants, thus dictating that brokers adopt the relevant systems.
Through this agreement clients will now have access to an expanded universe of related data to help support their front, middle and back office operations. BGC Partners OTC pricing and data content primarily consists of executable or tradable prices sourced directly from its global electronic platform and hybrid-voice broking operations.
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Last year, many technology companies considered the adoption of what is known as big data as a priority, and engaged in acqusition of complex event processing firms.
Two specific examples of this occurred within the same period, with Software AG having acquired the Progress system from Apama, and Streambase acquiring Tibco in order to gain its own real-time analytics.
Interactive Data cites BGC Partners’ global FX options, non-deliverable forwards (NDFs), interest rate options (IROs), Euro interest rate swaps (IRS) and emerging markets as specific areas via which its clients will be able to gain enhanced content sets designed to support both their OTC trading and reporting requirements.
In order to go some way toward clarifying the form that this collaboration will take, Emmanuel Doe, President of Interactive Data’s Trading Solutions Group, made a statement on behalf of the firm today that, “BGC Partners’ technological capabilities and wide range of OTC trading data are important to the global electronic trading community, and providing our clients with access to this data underscores our commitment to offering comprehensive data and connectivity options to our clients.
We continue to invest and build out our specialist data content coverage and enhance the methods through which that content is delivered. With BGC we are working alongside an industry leader as part of this ongoing program to provide expanded OTC data and flexible enterprise data distribution capabilities,” he concluded.
FX Options Holding Strong In America
Whilst this particular collaboration relates to an institutional trading environment, which in North America means being subject to the trade reporting rules set out in the Dodd-Frank Act, therefore requiring systems which can cope with the demands of conforming, the retail FX sector has also experienced a rise in FX Options business recently, with FXCM’s SuperDerivatives joint venture platform DCX having performed very well during the the entirety of last year, and perhaps more remarkably given the continued protraction in overall FX volumes as the year drew to a close, CME experienced a 4.54% rise in exchange-traded FX Options volumes in December compared with the previous month.
Mark Benfield, Executive Managing Director and Global Head of BGC Partners’ Market Data Group, rounded off the proceedings by explaining that, “BGC Partners continues to work with clients and distribution partners on providing flexible access to our high-speed direct OTC data and pricing feed.
Our collaboration with Interactive Data supports the BGC Partners direct enablement model, allowing clients to source BGC pricing data in the manner that best supports their business needs,” said Mr. Benfield.