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Screenshot of a breaking news alert e-mail from Q2 2017
Forex industry insiders know that even without recent controversies around FX “price fixing”, there is a long history of inherent distrust between suppliers and consumers of FX prices. This is in part due to the OTC nature of the market, but also because foreign exchange trade represents the world’s largest and most liquid market, generating a massive amount of data that can become unwieldy and hard to manage. Knowing the exact price that a given currency pair was trading at an exact minute, or second, for many market participants is a very arduous task.
Last week, Tradermade Systems Ltd., a subsidiary of Currency Mountain Holdings, LLC, launched FXQuest, a new cloud-based technology platform that aims to enhance transparency in the FX market and serve as an independent warehouse of accurate pricing data for the entire industry.
FXQuest brands itself as “the world’s most comprehensive database of price information on the forex market.” The tool serves as an independent verification of an exchange rate for both the buy and sell side, providing reliable and accurate information on more than four decades of forex data. FXQuest is customized to identify and verify an exchange rate at a specific point in time ranging from one day to one second, including high, low, open and close rates.
The user interface is available online and can process both individual and batch queries. FXQuest also records all requests made, meaning they can be reproduced or verified for accuracy for a myriad of purposes including compliance, audit and benchmarking. FXQuest is currently available to TraderMade customers on a subscription basis.
LeapRate spoke to Tradermade Systems CEO David Upton to learn more about the company’s ambitions for the new product. Here’s what he had to say:
Q: The FX market generates more data than any other market, how is that you’ve been able to generate such an impressive database?
We’ve been specializing in “big data” before the world knew what big data was. For more than 30 years we’ve been focused on gathering, curating and storing FX data. In the old days, that data would be delivered to our London headquarters via reams of paper in a taxi cab. Nowadays, thanks to cloud computing and other technologies, we’re able to store, process and deliver the data to clients much more efficiently. Our sole focus on data also allows us to do this better than other groups that provide additional services such as trading, execution or risk management services.
Q: What kind of clients are you targeting to use FXQuest?
FXQuest has broad applications and can be used by a wide range of professionals on both the buy and sell sides. On the sell side, the traditional client base is banks but we’re also seeing a lot of growth with dealer-to-client bilateral markets since there’s also a demand for accurate independent data there as well. On the buy side, we’re targeting anyone who wants to verify fair pricing or valuation data, such as fund managers and intermediaries.
Q: What are some of the uses of FXQuest?
We’ve put together a product that we want to be a definitive resource for intermediaries and their customers. Uses can range anywhere from benchmarking to establish a fair foreign exchange rate or valuation at a specific historical point in time; to counterparty monitoring to verify that prices or valuations provided by FX brokers, banks, custodians, fund administrators, external auditors and accountants are fair and accurate. FXQuest data can also be used by sell side market participants as an independent verification of a foreign exchange rate transacted with a customer.
Q: What is unique about FXQuest’s data?
Independence and the way we approach pricing.
We have no vested interest in the prices we supply our clients outside of supplying them the most accurate data in the world. TraderMade’s inventory of FX data goes back 40 years, and it’s always been delivered by external parties and then verified by our independent team of data technicians. Because we’re independent, we’re able to collect and curate this data without bias.
Another differentiator is that FXQuest utilizes midprice data, with the customer being able to supply a spread for the purposes of validation. This reduces inherent variances in the collected data based on trade size and source, further enhancing the quality of the data held.