Article published in e-Forex, July 2016.
IPC recently launched its FX Hub, a low latency, co-located performance solution engineered to address the industry’s most complex trading challenges.
The FX Hub is centered at the heart of the global foreign exchange markets, specifically Equinix’s International Business Exchange™ data centers in New York, London, Tokyo and Singapore as well as other major FX centers such as Moscow, Chicago, Frankfurt and Zurich. The hub empowers customers to connect quicker, reduce costs and trade more profitably.
With the FX Hub, customers have access to IPC’s vast community of financial market participants and are positioned locally with low latency access via IPC’s dark fiber rings to key FX liquidity providers and dealers.
“Successful trading in the foreign exchange markets is challenging given the complicated market structure,” said Larry Tabb, CEO of Tabb Group, a leading financial markets research and strategic advisory firm. “There are a vast number of instruments such as currency swaps, forwards, options, indices, outrights, non-deliverable forwards and structured products along with many exotic currency pairs that are being traded by market participants. FX is not just about spot transactions or trading only G4 currencies.”
Tabb continued “We see non-dealer financial institutions, insurance companies, corporate treasuries and brokers increasingly deploying performance-engineered managed hosting, connectivity and colocation services to benefit from economies of scale, access a range of liquidity venues, achieve best execution and participate cost-effectively in the global FX markets.”
The increased need for reliable connectivity to source liquidity, mitigate risk and harvest alpha in the FX markets is largely due to growth in non-dealer financial institution participation, the increased use of execution algorithms and the lack of a central marketplace. Given these market dynamics, IPC’s FX Hub offers investors:
- Easier and faster connectivity to brokers/dealers, investment banks, prime brokers, and liquidity providers to trade effectively, achieve best execution, discover prices and minimize market impact.
- Efficient access to market data and trade lifecycle services such as order management and execution management systems as well as data and transaction cost analysis services.
- Improved collaboration among traders, portfolio managers and risk managers to execute investment strategies and manage risk.
- Access to a full community of services and simplified management.
- Comprehensive and affordable business continuity management, disaster recovery planning solutions to ensure 24/7 access to the FX markets that is underpinned by an industry leading global provider with exclusive focus on financial markets.
When using FX Hub, IPC provides customers an aggregated handoff that offers connectivity to multiple venues. IPC is responsible for local cross connects within the co-location facility along with coordination and integration into local FX venues and banks. IPC offers flexibility and connectivity options for various customer scenarios.
- Existing Equinix Co-located Customer: For customers who are currently co-located at Equinix’s New York, London and Tokyo data centers, IPC will provide a cross connect back to our FX Hub infrastructure.
- Co-located IPC Hosting Rack Customer: For customers who want to co-locate their servers, IPC offers a dedicated hosting rack for customer equipment with a cross connect to our FX Hub infrastructure.
- Existing IPC Financial Market Network Customer: For existing IPC Financial Market Network customers, IPC offers connectivity into FX Hub via their existing IPC connectivity.
“The growing participation of pension funds, insurance companies, regional banks, hedge funds and proprietary trading firms in FX has led to more heterogeneity in the markets,” said David Brown, Senior Vice President and Managing Director, Financial Markets Network, IPC. “Consequently, reliable, secure and operationally resilient managed network services as well as access to an ecosystem of diverse counterparties have now become the backbone for successful FX trading. Our FX Hub underscores IPC’s wholehearted commitment to serving all participants in the global FX markets, the world’s largest and most liquid asset class, with cutting-edge solutions.”