Saxo Bank has tapped FairXchange for its liquidity management platform Horizon.
Guy Hopkins, CEO and founder of FairXchange, said Saxo was one of the very first institutions to embrace data-driven dialogue with their liquidity providers.
Speaking to BEST EXECUTION, Hopkins said: “To date, buy-side focus on execution quality has rightly focused on satisfying regulatory obligations such as MiFID II. However this is evolving rapidly with an increased focus on commercial outcomes as well as regulatory ones. Liquidity management covers a broad range of areas; more than just counterparty selection, it also influences both timing and style of execution, with the aim of ensuring sustainable long term relationships and predictable transaction costs.”
“For the sell side, the liquidity management process is a way for them to work with their clients to ensure the flow they receive can be monetised sustainably, particularly in the area of minimising market impact. If a client can transfer their risk quickly, efficiently and with minimal market footprint this suits both them and their liquidity providers – representing a true win/win,” Hopkins added.
James Dewdney-Herbert at Saxo said: “Since we went live with FairXchange we have already noted a material uplift in engagement from our trusted liquidity partners, leading to greater profitability both for them and for us, ultimately resulting in better liquidity for our clients.”
Talking to BEST EXECUTION, Dewdney-Herbert noted: “By partnering with FairXchange we have removed ambiguities around flow valuations for our discussions with clients and liquidity providers alike. In working with a credible, third party application we mitigate conflicts of interest whilst replacing subjective perceptions with quality data.”
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