The costs faced by full-service electronic trading platforms and electronic communication networks (ECNs) – and the expectations of buy-side and sell-side market participants – have never been higher. Technology and business needs have become more complex, data-centric and time-sensitive, and building new platforms requires a substantial investment in R&D alongside ongoing development and maintenance costs.
Cathrine Poulton, global buyside head of GlobalLink FX product sales, says estimates of the annual cost of maintaining regulatory compliance range from $1.3 million to $3 million for each regulated platform.
“Then there is the ever-changing market structure,” she adds. “It is imperative that regulated platforms are demonstrably stable, scalable and well governed, while focusing on investor protection and still providing transparent access to liquidity.”
Partnership value
According to Patrick Bartle, managing director of LMAX Exchange, platforms have to evolve through partnerships as well as M&A to stay ahead of the market. He references the importance of the Cürex deal in terms of enhancing the firm’s proposition to real-money clients, but adds that partnerships across the ecosystem are central to a well-functioning market.
GlobalLink’s Poulton says the cost of building a net-new, full-service trading platform from scratch has encouraged some providers to focus on solving specific business problems.
“These
