Speaking upon the release of Fair and Effective Markets Review (FEMR) in June, Andy Woolmer, Managing Director at New Change FX says that FX algo users are waking up to the idea of assessing their algo providers more rigorously.
“There is a general requirement [in FEMR] that everybody moves into a more robust, honest and open structure,” he says. “Independently derived rates enable clients to compare one algo with another. The circumstances of execution are different for every single deal that’s done. Measuring any algo against that institution’s mid rate is fairly worthless. We do a lot of work with algos and what we find is that once you’ve got an independent rate you can see a lot of what an algo is doing.” Woolmer believes that applying this type of measurement to FX algorithms is a very positive step towards creating a much bigger market for them.