BidFX - offering algo access and class leading toolsets to help clients manage their trading flows
TradingScreen company BidFX is a leading provider of electronic trading solutions for the global financial marketplace. The firm is addressing many of the challenges of the FX market head on with a complete suite of negotiation protocols which include Autorouting, Streaming, RFS, Voice and Algos. John McGrath, Chief Revenue Officer of BidFX talks to FXAlgoNews to tell us more about its platform and electronic trading solutions and how they are meeting increasing demand from clients in a post MiFID II world.
John, what prompted TradingScreen to establish BidFX as a dedicated and focused business line for e-FX?
Offering a truly multi-asset class EMS from a single screen and a single connection whilst leveraging the same SaaS infrastructure, has always been a key selling point for TS, but the establishment of BidFX as a dedicated and focused business line for eFX has enabled it to build out the product more quickly and more efficiently. This in turn has enabled us to compete more effectively against the longer established and more entrenched FX specific multi-bank platforms. We moved into our own office space in London in March 2017 and now have dedicated development and business personnel in our other offices all around the globe.
The growth of BidFX’s business in terms of both new client acquisition and average daily volume, already demonstrates the decision. This is obviously great news for BidFX but also for TS as a whole as it strengthens the overall EMS value proposition. More and more of our multi-asset class pitches demand a best-of-breed FX solution which is competitive compared to the historically dominant incumbents. As a result, we are increasingly winning new mandates and are able to capitalise on cross-selling and up-selling opportunities where a buy side has initially started on the FX only or the Listed only side.
FX remains a relationship driven business for most market participants. How has that influenced the way BidFX has been designed?
BidFX has evolved with clients, and their relationship driven business is at the forefront of design. We are aware that for most clients their choice of FX EMS is there to enhance the workflow and provide an evolution of this model which has, for the most part compared to other asset classes, led to a well-functioning and efficient market. It’s this functional and efficient market we look to enhance with BidFX’s capabilities.
Please tell us a little more about BidFX's client driven model and how it helps to create an environment that can facilitate best execution?
BidFX is all about our clients. Our clients are all market participants – liquidity consumers and providers. In the past year best execution has been one of the driving factors behind the adoption of BidFX as many clients choice of EMS or platform.
In what ways do you think the overall EMS value proposition has strengthened recently?
There is no doubt that regulatory changes and increased awareness of FX workflow and its place within a multi - asset firm strategy has led to a lot of clients either reviewing current FX and EMS propositions or embarking on an RFP in order to move from traditional older style FX only platforms to multi- asset EMS or dedicated FX EMS. BidFX’s recent growth has been exponential in terms of volumes and clients and is driven by innovative solutions delivered to an increasingly complex eFX market. No two clients are the same anymore and the BidFX technology framework and infrastructure must have the flexibility to deliver enhancements that help clients innovate as well as being technically robust enough to disseminate billions of price ticks per day.
BidFX offers a truly multi-asset class EMS. In what ways can you assist clients to access a wider range of industry leading FX algorithms than many of your competitors?
The evolution within the eFX market in conjunction with the increased regulatory framework has led to many of our clients looking for more sophisticated execution mechanisms. As part of this we have been working with our Liquidity Providers to provide an Algo Hub service to clients which encapsulates a complete range of LPs and strategies with no development and infrastructure costs. As well as a Best of Breed Algo Hub we work closely with our Algo providers to ensure any new Algos can be onboarded as quickly as possible in line with client demand.
What in-depth analysis of trading performance can you provide and what are buyside firms especially looking for in terms of analytics to inform the FX execution process and post trade TCA?
Clients can use our pre-canned TCA or unique tick by tick database in order to build an extremely powerful decision-making product, pre-intra-post trade, which can be combined with cutting edge execution capabilities to offer a powerful analytical and trade execution solution. We have seen a lot of investment into this area at BidFX and will continue to invest and innovate to meet client demand.
Broker randomisation tools, better known as algo wheels have now arrived to give traders the ability to assess, monitor and justify algo and broker choices to regulators. Do you expect to see more use made of algo wheels and other multi-broker allocation processes in FX?
A lot of our clients are tier 1 multi - asset institutional accounts who are either already familiar with the algo wheel concept or are market leading in their approach to regulatory and market oversight requirements. Many of them have already implemented stricter governance and testing around the policies of algo selection and it’s important the client selects the right algo provider and algorithm based on a number of factors. To do this you need a tech provider who can react to developments such as these and deliver solutions back to the client for them to implement. Our multi- asset EMS approach allows us an advantage to roll this feature out across several asset classes.
What impact are regulatory developments and MiFID II in particular likely to have on shaping future demand for solutions from BidFX including increased algorithmic trading access?
MiFID II was a catalyst for many firms in Europe through 2017 to take a fresh look at their FX workflow and how they react to the upcoming regulatory landscape with their current FX provider. We saw a substantial increase in large buyside approaching BidFX to discuss transparency and best execution, and many saw MiFID II as a catalyst for implementing a more future proof eFX policy in order to protect themselves over more traditional platforms concentrating on revenue protection. One of the added benefits of BidFX is that it has been developed, and continues to develop, with the best market leading technology possible for the current environment. Clients can use our TCA product or/and our tick by tick database in order to build an extremely powerful decision-making product which can be combined with cutting edge execution capabilities of which our Algo hub is part of the solution.