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Multi Dealer Platform Analysis

Comparison of major FX multi-dealer platforms

2019 E-FX MDP Ranking: The Pursuit of Platform Scale

Executive Summary

 The world of multi-dealer platforms (MDPs) continues to evolve and, with it, capital markets microstructure. Recent merger and acquisition (M&A) activity requires that we expand our notion of what are MDPs and with whom they compete. FX price takers looking for multi-dealer liquidity in any number of FX marketplaces: over-the counter (OTC) venues, regulated exchanges, electronic broking venues, swap execution facilities (SEFs), multi-lateral trading facilities (MTFs) and select nontraditional venues like Bloomberg FXGO and FXSpotStream.  

  

Recent M&A activity has occurred in response to strategic threats posed by large firms growing trading volume at double digit rates annually, while another known goal was for major stock exchange groups to own a piece of the OTC FX marketplace. Examples of the M&A trend include: Cboe Group’s acquisition of BATS (which includes Hotspot, now known as Cboe FX), Deutsche Borse’s purchase of 360T and Gain GTX, Euronext’s acquisition of Fastmatch, and CME Group’s acquisition of NEX Group. 


The top three FX MDPs in the space (Bloomberg FXGO, State Street’s FX Connect, and Refinitiv’s FXall) have their respective “sticky glue” to draw in / retain coveted buy-side clients. The Bloomberg FXGO franchise has been on a tear in recent years while the largest E-FX firm (Refinitiv) is having a banner 2018, a reality not lost among anxious peers. 


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Major FX multi dealer platforms ranked by known or estimated foreign exchange trading volume
Major FX multi dealer platforms ranked by known or estimated foreign exchange trading volume