With technology transforming how hedge funds run their trading operations, and the appetite among managers for high-quality market data and analytics tools on the increase, FX trading solutions specialist 360T is looking to evolution rather than revolution to stay ahead of the game, says the company’s Head of EMEA, Sebastian Hofmann-Werther.
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With technology transforming how hedge funds run their trading operations, and the appetite among managers for high-quality market data and analytics tools on the increase, FX trading solutions specialist 360T is looking to evolution rather than revolution to stay ahead of the game, says the company’s Head of EMEA, Sebastian Hofmann-Werther.
Can you outline the industry trends which have been driving growth and development within your firm over the past year and in what areas has your firm experienced the most significant growth?
The growth of 360T over the past year has been driven by both macroeconomic and industry-specific factors.
At the macroeconomic level, geopolitical events and divergent interest rate policies caused a sustained spike in FX volatility, which boosted trading volumes across the board.
Simultaneously, a number of internal initiatives at 360T that are strategically aligned to FX industry trends have also come to fruition in the past year, including the completion of an upgrade to the infrastructure underpinning our ECN, 360TGTX, and implementation of new rules around the platform to help ensure that users comply with the FX Global Code of Conduct.
We also expanded our suite of award-winning market data products, further refined the advanced automation tools available in the 360T Execution Management System (EMS), and launched Base Metals trading on our platform.
How have client needs and demands changed and what has your response been in terms of your service offering?
The desire for high-quality market data – particularly for marketplaces that are more opaque like FX Swaps – continues to grow amongst hedge funds. As a result, we further enhanced our Swaps Data Feed (SDF) by extending the maturity for G10 currencies out to 10 years and adding additional data points, such as ECB, BoE and Fed meetings, to provide added granularity. We also launched our Precious Metals Data Feed (PMF), to bring greater transparency to this marketplace.
Linked to this desire for data is the increasing need for powerful analytics tools. 360T’s Vantage platform makes the highly advanced analytics tools we initially developed for our most sophisticated users widely available to our customer base of more than 2,400 buy-side firms.
We also launched Base Metals trading in response to demand from our hedge fund users who wanted to apply the same solutions we had developed for FX, which enable them to trade in a more efficient, automated manner, while also putting pricing into competition to ensure best execution.
Given that hedge funds are constantly looking at ways to gain a competitive edge and boost performance, at 360T we are committed to implementing three new technology releases per year, enabling our solutions to evolve alongside the needs of our clients.
Are there upcoming regulatory updates which could affect your business and that of your clients?
Earlier this year the European Securities and Markets Authority (ESMA) weighed in on the definition of what constitutes a “trading platform” under MiFID II, with those who meet the criteria having to register as a Multilateral Trading Facility (MTF). Hedge funds utilising platforms not currently registered as MTFs could potentially see their trading disrupted as a result.
At 360T, we offer access to an MTF in the EU, and will be adding UK access shortly too, plus a Swaps Execution Facility (SEF) in the US.
Regulation could also increasingly fragment along geopolitical lines, with the requirement for providers to create separate entities in Europe and the UK – post-Brexit – being an obvious example of this. If the trend continues it will ultimately require increased investment and will add more complexity for hedge funds, driving them towards partners who have global, regulated operations with localised expertise.
Can you identify any trends which could change or influence the industry?
As the data, technology and infrastructure available to hedge funds for trading NDFs, Outright Forwards, Swaps and Options continues to evolve, more trading activity will naturally drift towards electronic channels. As a consequence, firms will automate, conducting high-precision, no-touch FX trading and using unique data sets integrated into execution systems as a tolerance check and benchmark.
A greater use of artificial intelligence by hedge funds is also inevitable, but technology will enable rather than replace human traders. Employees at hedge funds that have used 360T’s technology and data to automate trading activity have not been made redundant, but have instead moved up the value chain within their organisations by spending more time on their highest ‘value-add’ tasks.
Sebastian Hofmann-Werther, Head of EMEA, 360T – Sebastian Hofmann-Werther joined 360T’s Group Executive Board in October 2018 as Head of EMEA. Sebastian is passionate about putting clients first. In addition to managing 360T’s EMEA Business and Sales Team, his role as a Member of the Group Executive Board oversees the Client Services team, the global Marketing and Sales Enablement strategy, and drives 360T’s New Business Initiatives and Client Segment expansion.
