Technology provider IPC Systems has launched FX Hub, a low latency, co-located performance solution engineered to address the industry's most complex trading challenges. IPC's FX Hub is centred at the heart of the global foreign exchange markets, specifically Equinix's International Business Exchange (IBX) data centres in New York (NY4), London (LD4), Tokyo (TY3), and Singapore (SG2) as well as other major FX centres such as Moscow, Chicago, Frankfurt and Zurich.
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, according to David Brown (pictured), senior vice president and managing director, financial markets network at IPC.
"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," said Brown in a statement. "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."
IPC's FX Hub provides 'easier and faster connectivity' to brokers/dealers, investment banks, prime brokers, and liquidity providers to trade effectively, achieve best execution, discover prices and minimize market impact; 'efficient 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; and 'access' to a full community of services and simplified management.
"Successfully trading the foreign exchange markets is challenging given the complicated market structure," said Larry 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. "
According to Tabb, non-dealer financial institutions, insurance companies, corporate treasuries and brokers are "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 new FX Hub also offers 'comprehensive and affordable' business continuity management, disaster recovery planning solutions to ensure 24/7 access to the FX markets.
The IPC Financial Markets Network interconnects global financial centres and allows access to more than 6,000 market participant locations across 700 cities in more than 60 countries.
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