Trading Technology: IPC Debuts FX Hub Solution

The new low-latency system aims to enable alpha generation, liquidity sourcing and risk mitigation in the global FX markets.

IPC Systems has launchedFX Hub, a low latency, co-located performance solution.

IPC’s FX Hub is focused on the global foreign exchange markets, specifically Equinix’s International Business Exchange (IBX) data centers inNew York(NY4),London(LD4),Tokyo(TY3), andSingapore(SG2) as well as other major FX centers such asMoscow,Chicago,FrankfurtandZurich. The solution aims to deliver access to IPC’s vast community of financial market participants and positioned locally with low latency access via IPC’s dark fiber rings to key FX liquidity providers and dealers.

The increased need for reliable connectivity to source liquidity, mitigate risk and harvest alpha in the FX markets is largely due to growth in non-dealer financial institution participation, the increased use of execution algorithms and the lack of a central marketplace.

FX Hub is aimed to offer the following features, according to company claims:

– Faster connectivity to brokers/dealers, investment banks, prime brokers, and liquidity providers.

– Access to market data and trade lifecycle services such as order management and execution management systems as well as data and transaction cost analysis services.

– Improved collaboration among traders, portfolio managers and risk managers to execute investment strategies and manage risk.

– Business continuity management and disaster recovery planning solutions.

“Successfully trading the foreign exchange markets is challenging given the complicated market structure,” saidLarry Tabb, CEO of Tabb Group. “There are a vast number of instruments such as currency swaps, forwards, options, indices, outrights, non-deliverable forwards and structured products along with many exotic currency pairs that are being traded by market participants. FX is not just about spot transactions or trading only G4 currencies.”

Tabb continued, “We see non-dealer financial institutions, insurance companies, corporate treasuries and brokers increasingly deploying performance-engineered managed hosting, connectivity and colocation services in order to benefit from economies of scale, access a range of liquidity venues, achieve best execution and participate cost-effectively in the global FX markets.”

“The growing participation of pension funds, insurance companies, regional banks, hedge funds and proprietary trading firms in FX has led to more heterogeneity in the markets,” saidDavid Brown, senior vice president and managing director, Financial Markets Network, IPC. “Consequently, reliable, secure and operationally resilient managed network services as well as access to an ecosystem of diverse counterparties have now become the backbone for successful FX trading.”

Brown continued, “Global trade depends on efficient and accessible FX markets. Today’s announcement underscores IPC’s wholehearted commitment to serving all the participants in the global FX markets, the world’s largest and most liquid asset class, with cutting-edge solutions.”