Recent research carried out by RCP with tier one FX traders and venue providers indicates that only a very small percentage of FX clients are provided with post-trade STP facilities by their trading partners. The two main reasons for this are the cost and the difficulty of providing client-side integration. However, it is generally accepted that wider access to STP and post trade services would have major benefits for both parties.
In response to market demand the new generation of messaging from B2 Hub FX provides a bi-directional connection: as well as publishing FX trade confirmations B2 Hub FX will allow clients to consume software services such as matching, netting and reconciliations which can be provided by the hub or as value added services by a bank or a software service provider.
Commenting on the launch of the B2 FX STP service, B2 Hub CEO, Phil Boland, noted: âWe are delighted to have RCP on board as partners for the B2 Hub FX STP launch. B2âs expertise in outsourced STP combined with RCPâs many years of FX know-how and presence in that market sector allows us to offer a first-class service which, according to our recent market research, is desperately needed.â
Paul Burgess, head of strategy at RCP, said: âThis is a major step forward for FX STP. More institutions and corporate clients will have access to high value STP and post-trade services. We also see the B2 Hub connection as the conduit of choice for banks wanting to provide their clients with an enhanced range of services. This is especially important for corporate clients, who are currently poorly served by the trading venues, where services such as SWIFT connectivity, cross-border payments and reconciliations could be easily delivered via the hub. We will be providing integration capabilities with the major Enterprise Resource Planning (ERP) and corporate treasury systems.â Burgess adds: âAs B2 Hub has built-in support for most financial asset classes and a powerful workflow engine, we have the ability to provide rapid, cost effective solutions to any bankâs internal and external STP and messaging requirements.â
The trading desks at more active buy-side institutions can benefit from swapping trading platforms to obtain the best rates. However, the complications that come with multiple connections to multiple trading venues can rule out a trading platform change simply due to the delay, IT resources and costs involved. RCP research shows many of these institutions have a separate STP connection for each platform, requiring individual routing through the firewall and duplication for disaster recovery purposes. This results in significant support and cost overheads. By using a single connection for multiple platforms, the B2 FX STP Service is a solution that provides trading platform flexibility together with reduced overheads.