The compression provider LMRKTS has recently facilitated the first multilateral FX compression designed to lower counterparty exposures and consolidate cash flows. LMRKTS has announced today a new strategic partnership with Tradition, wholesale market brokers in over-the-counter financial and commodity related products. The partnership between the two firms will initially handle execution and compression processing unique to FX Forwards. A limited release is planned for August and the full commercial release later this year. Additional asset classes will be added over time.
LMRKTS’s leadership team, is comprised of senior trading and post-trade industry professionals, and has been discreetly working on this FX solution with a select number of banks for over a year. The company’s focus has been on refining its technology and product to ensure it is in tune with the market – to offer a solution that is easily scalable and delivers risk efficiencies at a reduced cost.
The LMRTKS offering is an analytic that sits on top of existing market infrastructure. Participants set bespoke constraints and objective functions and LMRKTS determines an output that is not only mutually beneficial but also lowers systemic risk. The power of the new partnership is that instead of a Chinese wall, LMRKTS paired with Tradition, offers a separation of church and state. Tradition’s broking business will have no information regarding the positions or exposures of the banks, but can still be employed to lower them.
Partnering with Tradition ensures that LMRKTS can scale their solution to meet the needs of the leading global banks.
As Andy Coyne, LMRKTS’ Interim Head of FX shared:
The combination of LMRKTS’ analytics with Tradition’s distribution, pipes and support allows both firms to showcase and focus on what they offer best. My role has been to help commercialize what has been in clinical trials to wider release. Fostering introductions and watching new banks test and sign on to the platform has been rewarding in and of itself, it speaks to banks’ priority of lowering counterparty exposures and associated costs.”
Dan Marcus, Global Head of Strategy and Business Development Tradition, comments:
We are delighted to be partnering with LMRKTS to provide the execution venue for their compression service. LMRKTS is a trusted and independent third-party that will enable our clients to retain sensitive trade information, reduce costs and risk exposures without compromising trading strategies. In the current age of FinTech innovation, this partnership demonstrates Tradition’s commitment to be at the forefront of technological change and ensure we provide the best service to our customers.”