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John Turney
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Foreign Exchange Infrastructure: Yesterday, Today and Tomorrow

In this exclusive to Traders Magazine, John Turney, Global Head of Outsourced FX at Northern Trust, discusses the evolution of the fx infrastructure and what is to come.

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August 1, 2013

Relentless

By Peter Chapman

Relentless. That's the best word I can think of to describe the nonstop deployment of technology in the securities industry.

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The big story about the transformation of the equities business through trading algorithms, dark pools and co-location has already been told, of course. But there is ongoing tinkering at the margins, as well as deployment in other asset classes. I can't find a single one of our stories this month that isn't, in some way, about technology. We have a profile about a buyside desk in Denver that is struggling to cope with an array of systems used to manage retail accounts. At the same time, we have a brief in the technology section that describes a new system meant to simplify that process. A feature about all the trading activity conducted during the last 30 minutes of the day includes descriptions of new or improved algorithms used to trade the close. Citi and Merrill are both active in this space. A Q&A with a broker and a vendor offers the idea that high-speed trading will migrate to more traditional players. While lowering one's latency is typically a concern of prop traders and market makers, the idea may be taking hold with quantitative fund managers.

Another story covers a survey of the buyside regarding the issue of brokers merging their high- and low-touch desks. The importance of technology for do-it-yourself buysiders is clear, as is the fear that any merger could compromise the anonymity associated with brokers' low-touch operations. In our new "Algo Update" section, we describe new labor-saving technology for the buyside being introduced by brokers Cowen & Company. We also include a profile this month about the head of a top program trading desk. The practitioners in that field were, of course, some of the earliest adherents to the power of automation. In the article, we learn that Morgan Stanley was already granting its institutional customers direct access to its trading infrastructure way back in the 1990s.

At Traders Magazine, we have, in recent years, broadened our coverage to include foreign exchange and equity options. Technology-wise, the picture in those businesses is no different than it is in equities. It has transformed options. It is transforming currencies. On the options side, we profile a broker trying to maintain a high-touch business in an increasingly low-touch world. On the fx side, we cover the inroads vendors and brokers are making with transaction-cost analysis. It's truly relentless! Just check the table of contents. You'll find the stories.

 

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