What every FX client should be asking their order provider

Commerzbank’s head of eTrading services, Nickolas Congdon, discusses the FX industry’s challenges around FX resting orders, streamlining manual processes and enabling objective order execution

In a market driven by digitalisation and automation, many aspects of FX order management remain burdened by onerous manual processes that increase operational risks, often resulting in significant profit-and-loss (P&L) movements. This only serves to slow down and complicate clients’ experiences.

Additionally, inherent conflicts of interest between FX voice traders’ P&Ls and client resting orders further drive the industry to not only take stock of the service they receive from providers, but also ensure their bank providers adhere to the FX Global Code’s principles.

Cumbersome traditional processes, coupled with an evolving regulatory landscape, may continue to push clients towards examining their existing FX order providers and current processes when it comes to FX order management. Clients should ask providers how they are managing their FX orders and whether this is in line with their own order execution policy and the principles set out within the code.

However, any solution that addresses manual processes and subsequent operational risks must satisfy all market participants, whether a corporate treasurer, trader, compliance department, portfolio manager or fund administrator.

The solution: automation

In response to these evolving regulatory and market trends, Commerzbank continues to leverage decades of electronic trading innovation and has developed an automated order management process that removes all potential conflicts while increasing execution transparency. Commerzbank understands that clients require faster, more intuitive, objective and user-friendly solutions that enable them to access reliable liquidity.

Clients can enter single orders or send their portfolio of orders electronically to Commerzbank, further reducing order entry execution time, with risk management tailored to their specific requirements, while taking advantage of our global coverage.

All order fills are agnostic to a user’s or Commerzbank’s current risk position, and follow the same symmetrical rules-based approach for execution. This removes the need for manual trading intervention and allows us to provide execution transparency while removing improper practices.

Commerzbank’s automated resting order solution also provides the added security of execution transparency. Similar to bank algorithm providers, Commerzbank goes further for resting orders and generates a detailed post-execution or transaction cost analysis report, detailing the order’s limit or stop-limit level, fills, timestamps and reference market benchmarks over the life of the order.

When effectively implemented, automation allows for agile management of FX orders, speeding up processes and providing the reassurance and peace of mind needed when navigating a rapidly evolving regulatory landscape.

Commerzbank’s eTrading Services support take-profit limit orders, auto stop loss with optional trailing functionality, one-cancels-the-other, loop and other contingent order types for FX spot, forwards and non-deliverable forwards orders. These orders are available via 360T, Bloomberg, BidFX, Commander FX Live Trader, FXall and FX Spot Stream. 

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