Institutional investors now execute half their FX notional volume via multidealer trading platforms, up from 38% in 2008. Greenwich Associates expects that number to rise, as 67% of the global top-tier users of FX interviewed in a recent study said they plan to increase the use of MDPs this year. Market structure changes are driving this growth, as the buy side is taking a more quantitative approach toward achieving and measuring best execution. Use of execution algorithms continues to lag, however, with only 13% of top-tier investors currently using them in their trading process.
Methodology
Between September and November of 2014, Greenwich Associates conducted in-person interviews with 1,612 top-tier users of foreign exchange at large corporations and financial institutions in North America, Latin America, Europe, Asia, Australia, and Japan. To be considered top-tier, a firm must meet one of the following criteria: be a fund manager, hedge fund, central bank, retail aggregator, Fortune Global 500 firm, or treasury center; or have reported trading volume of more than $10 billion; or have sales of more than $5 billion.
The data reported in this document reflect solely the views reported to Greenwich Associates by the research participants. Interviewees may be asked about their use of and demand for financial products and services and about investment practices in relevant financial markets. Greenwich Associates compiles the data received, conducts statistical analysis and reviews for presentation purposes in order to produce the final results. Unless otherwise indicated, any opinions or market observations made are strictly our own.
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