FX Post-Trade Processing

Aite Group, Boston, MA | January 6, 2009

Extracts from ‘The Next Challenge in FX: Creating a new Post-Trade Paradigm in an Electronic Reality’, a report which examines the Trends and Challenges in the FX Post-Trade Market.

***

"Driven by various market structure changes, adoption of electronic trading, and changing client profiles, the daily processing of FX trade tickets has increased substantially over the last five years. CLS, the industry-adopted platform for FX settlement, which accounts for approximately 55% of all FX tickets settled, is a great benchmark for where the global FX market is headed. Since its launch in September 2002, CLS saw its total settled tickets increase from less than 6,000 tickets per day in 2002 to close to 730,000 tickets per day by October 2008. Despite the decline in numbers from October to November 2008, the incredible growth of the FX market is undeniable. Growth in total number of tickets also means that the overall value of the daily FX trading market has increased substantially. By November 2008 (year-to-date), the FX market represented by the total number of tickets settled within CLS averaged US$4 trillion a day. The sheer size of the daily volume makes it even more critical for the industry-wide processing infrastructure to finally catch up with the innovations that have already taken place in the front office."

***

"Perhaps the most important and highly anticipated initiative from Wallstreet is the launch of its Electronic Settlement Network (Wallstreet ESN). Based on Wallstreet's trade processing and settlement infrastructure, ESN is being positioned as a pay-as-you go, post-trade processing utility. Wallstreet ESN aims to take the middle- and back-office operations headache out of small and midsize banks so that they can compete better with larger banks without having to invest millions of dollars in operational infrastructure. Wallstreet ESN is designed to cover the entire FX post-trade processing. Wallstreet ESN will support spot, FX derivatives, money markets, vanilla interest rate derivatives, and listed options and futures. Current Wallstreet ESN partners include Bloomberg, Currenex, NumeriX and Logicscope."

To purchase the full report or for additional information, please contact sales@aitegroup.com