In this interview, Andrea Sanna, the Head of Liquidity Management at Alp Financial, speaks with Bayo Akinloye on how financial institutions are adapting to the FX Global Code of Conduct, the challenges they face in ensuring compliance, and its impact on market transparency. Excerpts:
Tell us about the emerging opportunities in NDF trading in terms of exploring new regions and technologies.
AlpFin is currently investing significantly in reaching customers trading NDFs in Africa and South America. We believe that these regions are going to be more and more interested in a wave of adoption of EFX technologies as they approach electronic trading, and we are eager to support them with the aim of unleashing their potential.
What opportunities are there for your potential customers in Nigeria, as well as in other countries?
AlpFin, being an FX institutional agency broker, has exceptional credit standing that allows us to interact with all counterparties globally in the financial field. Our prime broker is NatWest Markets, and this allows us to reach, easily, all our counterparties around the world. This allows us to offer access to global FX markets to both banks and other institutions as well.
Talking about demystifying the ‘Last Look Practice’, is it a necessity or obstacle in eFX trading?
In our opinion, Last Look is a practice that adds value when used to check the validity of quotes upon order arrival or to verify if a customer has credit to trade with a certain entity. However, we believe that different applications of this tool may engender market distortions and disrupt the process of liquidity provision. While we do not outrightly denounce the adoption of Last Look practices by liquidity providers, we contend that adherence to the guidelines articulated in the FX Global Code of Conduct, to which AlpFin subscribes to, is necessary for its right implementation.
What’s your perspective on enhancing liquidity provision?
At AlpFin, we take very seriously the concept of liquidity management as a service. In order to guarantee high standards, we use advanced analytics offered by our technology provider (Lucera), and we periodically review the performance of each maker and taker. We do think that the key factors to be successful in liquidity management are proactivity, attention to detail, monitoring of reliable metrics, acknowledged and shared by makers and takers, and continuous and open communication with customers and liquidity providers.
What’s your take on the transformative impact of MiFID II and FCA regulations on the eFX industry? How are market participants adapting to these regulatory changes, and what are the potential future shifts?
The main changes that have been introduced by MiFiD II and FCA regulations are the new reporting requirements both in terms of quantity and frequency of information provided. Regulation had an impact on the quality of information that should be shared with the financial authorities as well. The moment you trade FX derivatives now if you are not adopting EFX automated trading and reporting solutions, it becomes rather difficult for clients and liquidity providers to access FX international markets. We believe that clients in Latin America and Africa will feel the urge to adopt EFX automated electronic trading solutions soon to improve their liquidity and execution while following the new regulations as well.
Regarding revolutionising eFX, can you please provide insights into the latest technological innovations in eFX trading?
From an agency broker perspective, the most important developments in the last years have involved the following topics: the possibility to have an off-the-shelf solution for aggregation and price distribution that guarantees low latency and infrequent/low downtimes, the customisation of tech solutions in terms of liquidity control, pricing control and pricing distribution, auto-hedging tools that allow agency brokers to minimise market risk, tech solutions that allow agency brokers to actively post firm interest into electronic avenues to maximise fill ratio and minimise market impact.
Algorithms in eFX are considered a game-changer for brokers and traders alike. What’s your thought on that?
We think that brokers in the future will be able to offer algorithms on an agency basis on behalf of bank and non-bank liquidity providers for FX Spot, Metals, and NDFs.
Can you talk about Alpfin’s tech tool, Lucera?
Lucera is our FX tech partner, which has been selected after a very thorough analysis. The efficiency and reliability that their system offers are unrivalled in the market, together with a great support team that guarantees support 24/5. This is very important for us to make sure that we can offer the best service to our liquidity providers and customers.
Can you please introduce yourselves?
I am Andrea Sanna, Head of Liquidity Management and Operations at AlpFin, together with my colleague Chris de Sibert, Global Head of Sales and Marketing. I have 10 years of international experience in the financial industry, and I am an electronic trading specialist in FX Spot, Metals, and NDFs.
Chris de Sibert: I have 30 years of experience in Foreign Exchange and Commodities Sales at Tier 1 banks and FinTech companies.
We are now jointly driving AlpFin’s FX Institutional strategy with the aim of bringing the business to become one of the major players in this space.
What services does Alpfin offer?
Where does it have offices, and what’s its global reach like? Alp Financial is an FCA-regulated agency broker operating in the FX Institutional space. AlpFin is based in the city of London, with a physical office at One Canada Square in Canary Wharf. Our offering focuses on FX Spot, Metals and Non-Deliverable Forwards. In terms of regional presence, although our offices are in London, we cover EMEA, Latin America and Asia.
Are there other things you would like to share with us?
If you would like to stay connected, follow updates, or reach out to our team to see what we can do for you, we encourage you to connect with our representatives on LinkedIn (Alp Financial), through our website www.alpfin.com, and at TTFX Miami in February 2024. We look forward to engaging with you and sharing more about our offerings and insights.
