FX Global Code drives demand for algos and TCA

The FX Global Code was formally launched just over a year ago and has already received the backing of over 400 of the world’s largest and most active institutions in the global FX market.

FX Global Code drives demand for algos and TCA
David Puth

The FX Global Code was formally launched just over a year ago and has already received the backing of over 400 of the world’s largest and most active institutions in the global FX market. A number of significant buy-side institutions with complex and sophisticated FX hedging operations have also signed statements of commitment to the code and many commentators believe it will drive greater demand from corporates in particular for algos and TCA solutions in order to measure and evaluate the quality of their trade execution. 

This belief is also shared by David Puth, CEO of CLS who led the development of the code. He notes that, “The FX market continues to evolve and we are seeing increased complexity, which is reflected in the number of liquidity sources and execution venues. As a result, corporates, which use the FX market to manage cash reserves and support their cross-border operations, have increased the use of tools such as algo trading as a means of managing their orders more efficiently, as well as transaction cost analysis to track price, market impact, and information leakage, all of which help to optimize their trading strategies.”