The recent FIX Trading Conference in London was a great opportunity to get insight on emerging trends and new industry thinking. Particularly satisfying at the Corvil stand was interest from delegates in the way we address changing demands around foreign exchange (FX) trading and MiFID II.
At Corvil we have been developing out expertise in FX monitoring for some time. As a trading segment, it isn’t as mature as equities and will always be more of a challenge because the model is highly distributed; people can buy currencies from anywhere they want at any time – retailer, bank, travel agent, broker.
This has been compounded in the last five years as FX followed the equities path by transitioning to electronic trading, exposing providers to more risk. Because there’s no single exchange and everyone is buying and selling at the same time, providers have to rely on real-time pricing feeds to make sure they offer clients the best spread, one that they can fulfill when the deal is done and still make money.
There are a lot of moving parts and plenty of opportunities to make mistakes by buying and selling at the wrong price. So if something goes wrong with a feed at the protocol or application layer, you need to know about it. This is where Corvil comes in.
We do all our monitoring on wire data, the network packets that are the first and best place to identify any issues. Then we provide an analytics layer to make sense of the data, bubbling up the most important insights to tell you what’s working and what’s not. We give you the information you need to drill down into the root cause of any problem and solve it before it’s had too much impact on your business.
While FX doesn’t require the microsecond latency needed in equities trading, margins may still come down to milliseconds. There is a correlation between fine-tuning latency and profitability, so we provide the tools to find out precisely what your sensitivity is and what visibility you actually need.
Now that MiFID II has become regulation in Europe, it’s no surprise that visitors to the FIX event wanted to talk to us about compliance. The word is out that record keeping and transaction reporting is a sweet spot for Corvil and we have advanced solutions that help ensure you stay on the right side of the new regulations.
As soon as MiFID requirements became clear, we began building new capabilities into our products. We’ve always done the heavy lifting by using granular data on the wire for real-time monitoring; now we have made it possible to stream the data directly into databases used specifically for storing compliance information. How clients use this functionality will vary.
Some companies choose Corvil to supplement existing record keeping capabilities; others make us their core solution. What we have always had as a key differentiator is timestamp accuracy that helps understand UTC-synchronized events. Keeping an eye the clock has always been important for our internal processes, but last year we opened it out and introduced our Clock Synchronization Reporting capability.
This is something that every bank and trading company can use, because it provides an audit trail that ticks an important box on regulatory requirements. Attending events like the FIX conference always reminds us how prescient our solutions have become.
Read more about our MiFID II capabilities and find out how we can help with FX trading.