P&L Talk Series – Barracuda FX

Kieran Fitzpatrick speaks with Colin Lambert from Profit & Loss about the impact of the Global Code, transparency, the work still to be done with regional banks, and the potential to take best practices in FX Orders and implement them for Fixed Income markets.

Colin Lambert: Barracuda FX recently completed a review of the Global Code from an order management perspective, what were the findings?

Kieran Fitzpatrick: We looked at the principles that impact FX orders and highlighted specific aspects and requirements for institutions of all sizes from all areas of the industry; banks or buy side institutions.

From this we can ask four simple questions:

  1. Do you allow clients to specify if their order is monitored by machine or manually?
  2. Is your order execution policy clear and unambiguous?
  3. Have you a transparent charging structure?
  4. Do you have appropriate visibility controls?

Orders are still a hugely controversial area in which banks need to step up their game – a lot has been done at the top tier one and two levels, but beyond that there is still a lot that needs to be completed. Even now, some smaller banks are still writing their orders up on a board, that will – has to – change.

CL: It strikes me that the Code has been a help to you in getting your message out about the importance of good order management technology.

KF: We saw a big uplift in demand as clients realised they needed to get an OMS in place because past practices were no longer acceptable, so yes, it has. Those handling the orders know that more control is needed, as is accountability.

It’s not all about the Code, though, equally as helpful has been the availability of better data to measure execution quality – this has taken a lot of the emotion out of order handling.

Again though, we recognise that it is not just about top tier institutions, that’s why we launched OMScloud, making this efficiency accessible to smaller banks. They have really been the last segment to wake up to their requirements in the new world and they need to show their adherence – a good OMS is at the heart of that.

The Code has helped raise the profile of order management, but we started the business because we believed that orders in particular were very poorly served in the market. There was too much focus on how fast a player was, but there were, are, a lot of non-immediate orders that everyone sees and we thought they could be handled better.

The complete interview is available at https://www.profit-loss.com/articles/p-l-talk-series/p-l-talk-series-barracuda-fx

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