Peer-to-peer (P2P) FX providers have struggled to convince corporates to cut their ties with banks they have lending or other corporate finance relationships, despite the promise of lower charges.
A number of providers have given up and changed their business model.
So, there is inevitable curiosity when a new entrant hits the market – especially one whose founder admits that P2P matching in FX has been attempted numerous times during the past decade with little or no success.
Will FX HedgePool be any different?
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Jay Moore, |
Yes, says CEO and founder Jay Moore, who argues that previous efforts focused exclusively on spot flow, where the trading requirements are typically a response to something else that has happened in the portfolio and need to be executed within a very short timeframe.
“We have taken a different approach by focusing on the swaps market and, more specifically, the monthly roll requirements of passive FX hedging programmes,” he says.
These swaps are relatively predictable, since most passive hedging programmes are mandated to maintain a fixed hedging policy at all times, usually with forward contracts rolling on a monthly or quarterly basis.
