On Friday this week, senior executives from across the entire retail and institutional FX industry will head to New York for this year’s FXIC conference hosted by Shift Forex at the Grand Hyatt Hotel in Midtown Manhattan.
New York is not only the world’s capital city, but is the pinnacle of institutional FX, and the nerve center of every development in the business, from regulatory directives concerning electronic trading infrastructure, to the plate glass head offices of Wall Street’s largest derivatives marketplaces and publicly listed FX companies.
FXIC is an essential fixture for those whose business requires requires the opportunity to gain exposure toward firms which provide and aggregate diverse pools of liquidity across multiple asset classes, or engage with those at the forefront of infrastructure and technology to discover how to improve execution practices both on and off exchange, whilst receiving an insight into the corporate direction of the major companies in the FX business this year, FXIC is the most important conference on the annual calendar.
LeapRate will provide live coverage direct from New York, bringing the global industry full and comprehensive detail of the topics of discussion throughout the conference, interviews with influential FX senior executives and full information regarding the direction that lies ahead among those who set the standard for the entire institutional and retail FX businesses.
In order to provide an important preview, LeapRate’s Andrew Saks-McLeod spoke to Ian McAfee, CEO of Shift Forex.
Shift Forex has a unique position in the FX industry as the host of FXIC which attracts the large conglomerates of North America. What can attendees expect to gain, and how does FXIC New York differ from other FX industry events?
FXIC New York is growing with new types of participants each year. We have over 600 people registered now. You can spot trends in the industry by following our sponsors, content, and attendee base. Last year we had one exchange sponsor, where this year there are three.
New York is larger than our other shows, and with so many people in finance in New York, we get a lot of interest from firms in other assets classes. We have two new networking activities this year, the panels of course, and lastly the receptions, where there’s always some great networking.
The long established institutional trading desks of New York and Chicago are a mainstay of the US electronic trading industry. What are the major factors for America’s large firms to consider this year?
The institutional buy and sell-side have full plate to manage. US market participants are currently waiting to see if the CFTC will follow ESMA’s lead re not mandating NDF clearing via central clearinghouses as well as related rolling spot issues.
The massive FIX fines paid by leading banks has institutional buy-side trader re-examining the ways they do business and their preferred counterparties in detail. Initially, this seems to have shifted volumes from European to US banks to an extent. It will be interesting to see if that trend develops further.
The next major change is to capital requirements, which will raise the cost of doing business for banks and their direct counterparties, dramatically in some cases. Depending on the final regulations, this new capital regime has the potential to radically remake the foreign exchange landscape by pushing more positions off bank books into CCP structures.
It’s certainly going to be an interesting year.
Last year, North American giants such as FXCM and GAIN Capital engaged in large scale mergers and acquisitions. Do you envisage more consolidation this year, or is 2015 a year of restructuring existing operations for many firms?
We expect continued M&A activity in the industry, but not limited to the retail sector. We’ve recently been involved in acquisition efforts both on the technology front as well as the institutional and retail segments of the industry.
Within retail, while there is continued consolidation among western based brokers, there are many off the radar, rapidly expanding firms targeting the APAC region that may either become acquisition targets or will venture outside their home territories via an acquisition program.
Many retail and institutional brokers are increasingly looking at technology plays as a means of differentiation, and have expanded acquisition efforts along those lines rather than just buying direct competitors.
Talk us through the networking opportunities for corporate attendees at this year’s FXIC in New York.
Networking is a big reason why attendees come to the conference. It’s extremely convenient to have representatives and decision makers from all over the industry in one place.
We’ve had great feedback from the conference last year, and we are adding something this year that we experimented with at FXIC Mexico City. We are dedicating time focused solely on networking with two speed networking sessions.
The feedback was very positive from Mexico, so we want to offer it to the attendees and sponsors in New York. Aside from that, the afternoon will have some networking activities, and of course the receptions are great places to meet new people.
The US is synonymous with extremely advanced trading infrastructure, very well recognized algorithmic and proprietary trading companies and the largest electronic market places in the world. What subjects are expected to be discussed at FXIC among these leading edge companies?
You are right; the US has is home to leaders in these areas. We have a panel specifically dedicated to algorithmic trading, as well as panel on bitcoin and the block chain. I don’t want to spoil the event for anyone, but if you register and can make the event, come check it out!
What aspects does Shift Forex consider important for those participating in the US market this year?
We expect participants in the US market to have to deal with similar issues to the rest of the globe. In the retail space, the result of SNB has harmed brokers here as it did worldwide, but it has had a large effect due to the small number of retail brokers in the US market.
On top of that, the CFTC and NFA seem to be set on further restrictions in the space. Purely from regulation and restrictions, it’s difficult to see anything but downward pressure on the brokers in the US. On the other hand, exchanges and market makers are further interested in the space. Three of our largest sponsors this year for FXIC are exchanges.
LeapRate’s Andrew Saks-McLeod will provide live and detailed coverage of FXIC New York throughout Friday.