Boston, May 2, 2012 – A new report from Aite Group examines key market trends and metrics currently impacting the global foreign exchange market and provides comparative data on leading execution venues. Among the trends examined are the penetration of electronic and algorithmic trading, and the geographic distribution of institutional and retail FX traders.
The global FX market continues to grow dramatically. Despite a decline in volume during Q4 of 2011, the FX market still grew substantially year over year, reaching US$4.7 trillion in average daily trade volume by the end of 2011. As a result, the FX asset class represents one of the largest global capital markets opportunities for banks, investors, and the vendor community. Still, the specter of increased regulation looms large, with certain products, such as non-deliverable forwards and FX options, slated to fall under Dodd-Frank regulations, and with them, the mandate for centralized clearing and strict reporting requirements. While regulatory pressures have not seeped into the rest of the FX market, the potential for more mandated changes certainly exists.
“The global FX market continues to grow, but not without challenges,” says Sang Lee, co-founder and managing partner with Aite Group and co-author of this report. “Potential regulatory changes could impact the rate of market growth. For now, key market participants must focus on better managing the decade-long changes that the industry has experienced: market fragmentation, growth in non-bank market participants, and an increased reliance on technology.”
This 23-page Impact Report contains 15 figures and two tables. It is available for download to clients of Aite Group’s Institutional Securities & Investments or Wealth Management services.