Forex - MoneyShow.com

RETAIL e-FX PROVIDER
Peter Kelleher
“Clients are seeking more information and on a real-time
basis, more aggressive netting and lower calculations in
terms of the margin requirement.”
Traditionally MarginMan was developed for banks
who are catering for a private client base. Kelleher
says that more recently they have come to look at the
Retail FX market and hedge fund side of the business
in terms of prime brokerage or give-up trading - the
market place that has evolved into high volume-type
transactions - in conjunction with on-line capability.
Exploding volumes
Another top provider is SunGard, with its Sierra
product line for FX Retail margining. Jim Dennelly,
senior vice president at SunGard’s Sierra business unit
based in Philadelphia, says that currently FX Retail
margining and FX STP is the number one business
currently for the Sierra product, a solution for FX
trading. He notes there has been a major shift in
margining over recent years. “The challenges facing
clients are unique with exploding volumes and having
to handle the tremendous growth in FX margining,”
he remarks. Go back a decade and margining was
something that was performed at the end of the day,
with a report produced that revealed what was owed
the next day. Limits were typically intra-day and there
were no real valuations.
“Today, the whole paradigm has shifted,” says
Dennelly. “Now even the smallest players are
distributing their services out across multiple platforms.
So, you could be a start-up and end up having two or
three electronic platforms right out of the gate.”
Sungard also have bigger firms who are connecting to
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around ten electronic platforms using Sierra, which
incorporates a margin trading and collateral
management module that monitors and analyses
client positions and risk in real-time. The solution
also incorporates a customer white-label module that
helps banks provide clients with easy access to
streaming rate dealing, position management, deal
status check and current market quotes.
Co-branding tools
David Lucas, managing director, Business
Development, Fortex Inc. in Chicago, says: “For us
the risk management tools that we put in place are
appropriate for any client, whether they be an
individual or an institution that is trading someone
else’s money. The firm, which has FX brokers as
customers rather than traders, has a preference to cobrand
its risk management and margining tools.
Recently their offering went live with FC Stone, a
large Chicago-based FX broker.
One thing that differentiates Fortex from a number of
risk management competitors is that the firm monitors
risk on the front end as well as the back end. “A
broker could have a risk warning on the back end that
would necessitate a reaction within the firm,” notes
Lucas. “Yet since we incorporate the trading and risk
management, we can automate the response to a risk
event.” Lucas notes in relation to the many parties that
have a vested interest in risk management issues, that:
“The broker certainly has a great interest in self
preservation. They don’t want to see a blow-up among
Jim Dennelly
“Now even the smallest players are distributing their
services out across multiple platforms.”