Tullett Prebon holds lead in options and forwards

Tullett Prebon will launch an electronic platform for foreign exchange forwards within the next two months, starting with Asian non-deliverable forwards (NDFs), as the interdealer broker continues to dominate in forwards and options in a world where regulatory reform is likely to drive increased volumes through electronic platforms.

While the interdealer broker declines to reveal details about the new platform, the decision to build it is part of its preparation for regulatory change to ensure it continues to deal in NDFs when the new rules come into force. But a lack of clarity over the specifics of regulation has made preparation challenging at times, says Paul Dunkley, managing director of volatility at Tullett Prebon in London.

"A lot of what we're doing at the moment is in preparation for regulations that are coming in. In terms of our request-for-quote options system, we now have quite a few banks connected electronically and we'll have more and more of those coming online as time goes on. There is also constant development of our straight-through processing facility. This is an important factor for the banks because from January next year they have an onus to be reporting to the swap depository within a tight timeframe. For any trades they execute via us, they need to receive the affirmation of those contracts as soon as possible," says Dunkley.

In July, Tullett Prebon announced it would launch tpSpotDeal, a new free-to-use spot FX platform, in partnership with trading technology provider Integral. The broker has also expanded its staff resources in emerging market options and in its hybrid voice team, as well as in forwards, where it has added staff to focus on sterling, the Turkish lira and the Russian ruble.

"We will continue to hire staff as and when opportunities arise. Markets are contracting at the moment and there are companies out there that are hurting. When you drill into the profit and loss of some of the recent company results, it is apparent the new people in forward FX must be suffering. We are absolutely looking, therefore, for good opportunities to take in staff that we wouldn't have got a year or two ago, who might look at our company as a more attractive place to work," says James Potter, managing director of treasury at Tullett Prebon in London.

A lot of what we're doing at the moment is in preparation for regulations that are coming in