Blockchain-Based Ledgers are Reshaping the Financial Back-Office

During any kind of financial transaction, before the trade, both parties must arrive at a shared understanding of market conditions and prices. After the trade, they need a mutually agreed upon means of processing, recording and settling the transaction. Each firm brings to the table their own applications, algorithms and infrastructure for exchanging data, and together they must agree on how to execute the transaction.

Today, many financial institutions hire 3rd-party settlement agencies (like CLS) to ensure the integrity of these transactions, trusting them to identify and rectify situations where things go sideways, whether innocently or as the result of fraudulent or non-compliant activity. Each company has a team that deals with reconciling these discrepancies. Including these agencies in the high-volume flow of transactions is important, but adds considerable complexity to the flow of information, and can be quite expensive.

The opportunity to fix this glaring market inefficiency is what has so many people in the financial services industry excited about blockchain-based ledgers: a single source of truth that all counterparties can see and trust.… Read the rest

FxPro Invests in Next-Generation Infrastructure with Solace Messaging and Web Streaming Technology

Higher Capacity and Performance Key to Meeting Customer Satisfaction Objectives as the Award-Winning FX Broker Expands into New Markets

Ottawa, Ont., February 16, 2016 – Online foreign exchange broker FxPro is using Solace technology to increase the capacity, performance and robustness of the messaging infrastructure that powers its advanced trading platforms and customer-facing interfaces.

FxPro is deploying a combination of Solace Message Router Appliances and Solace Virtual Message Routers to power a wide range of internal and customer-facing applications, including distribution within data centers, over wide area networks and via web and mobile devices.

“Our business is growing rapidly and it is necessary that we continue to offer a world-class trading experience and customer service as we expand our offering to cover more asset classes and geographies, ” said Panayiotis Annivas, CIO, FxPro. “Solace gives us a rock-solid foundation on which we know we can build and grow our business to meet customer demand.”

The new Solace infrastructure replaces multiple previously used technologies, including ActiveMQ, Kaazing and ZeroMQ.… Read the rest

The Electronification of FX Trading; Déjà vu All Over Again

Dices cubes with the words SELL BUY, one-euro coins and a financThis week, the Financial Times published a little piece of déjà vu in an article about FX trading rapidly moving towards electronic trading. Electronic trading has been around in FX for years, but many banks still rely on voice traders for larger transactions, especially in the $2 trillion spot market. That is changing, however, as recent compliance blunders and violations of customer trust by opportunistic FX traders are forcing change from the top down. The déjà vu part of this story is that it parallels the market making scandals in equities of a decade ago, and the Libor scandals of 2012.

Automation and electronic trading are the obvious end game for all kinds of trading, with the pace of change being determined by the profitability and risk associated with holding on to aging business models. In each asset class, the move will be made as fast as is warranted by customer demand for faster and fairer trades, increased competition, and the costs (both financial and reputation) of regulatory violations.… Read the rest

Is It Time to Rejuvenate Your FX Trading Infrastructure?

A common theme I hear from many senior IT people who run FX trading platforms is how the priority of rejuvenating their FX infrastructure is increasing. Why now? All of the big investment banks and FX ECNs have operated electronic FX trading platforms for some time now — since back when much of the trading demand from their clients wasn’t electronic, which meant latency requirements weren’t that stringent and peak volumes weren’t as high as they are today. There were also fewer sources of liquidity, less sophisticated trading capabilities, a lot less regulation to worry about, and corporate risk officers pretty much left them alone.

Many of these platforms used (and still use) several different types of messaging systems to do what they needed: multicast for price distribution, software brokers for persistence, and web streaming software if they wanted to offer a single dealer platform (SDP). So the infrastructure started off complex, which doesn’t help application architectures stay simple, and we all know that over time architectures grow more complex until there is a dedicated effort to simplify.… Read the rest

The reasons HFT is shifting asset classes may surprise you

At Solace, the shift to electronic trading has been at the core of our business in capital markets for many years. We’ve seen a variety of recurring use cases that are now mainstream, specifically for equities. For example:

  • Buy-side firms engaging in high-frequency trading (HFT), either onsite or at a co-location facility.
  • Sell-side firms offering smart order routing or internal order crossing to increase revenue or save on costs of order processing.
  • Exchanges accelerating and enhancing their services to compete with ever more sources of liquidity.
  • All kinds of capital markets participants improving how they handle real-time risk across trading systems, and/or automate middle-office settlement and record keeping.

Reg NMS and the Explosion in HFT

The path to these systems began with decimilization of equities in 2001 which dramatically increased electronic trading. Then in 2007, Reg NMS opened the door for many more competitors to supply liquidity, which created a n-way set of very-short lived arbitrage opportunities across trading venues.… Read the rest

FX trading architectures highlighted in new whitepaper from Catena

Technology architecture and design firm Catena Technologies just published a new white paper about appliance-based messaging applied to FX trading.

The paper addresses the business and technology requirements of FX trading and provides benchmark data measuring performance in a variety of configurations and usage patterns. The test results cover latency behavior, scalability and the flexibility to simultaneously deal with fast and slow consumers. Catena used Velocimetrics TipOff for all their test measurement.

I recommend downloading a copy, it’s a very interesting read. It’s available in Japanese and Chinese.… Read the rest

Standard Chartered Bank’s new FX infrastructure

We are very pleased to announce that Standard Chartered Bank has selected Solace for its next generation global foreign exchange trading platform. As one of the world’s leading international banks, FX is central to their banking operations and a key service to businesses and customers alike. Standard Chartered trades in over 100 currencies with FX trading teams on the ground in 39 countries.

The selection came after a detailed evaluation of the various products on the market against their requirements and resulted in extensive testing of multiple products against their requirements. They chose Solace because we were able to show them best-in-class messaging for each messaging requirement:

  • for streaming data from FX quote sources to pricing engines and clients
  • for guaranteed messaging between systems in each trading center
  • and for optimized WAN-based messaging between trading centers

Solace delivers all messaging functions through a single product and API, a single management framework, and a single operational platform.… Read the rest