A peer-to-peer (P2P) foreign exchange trading venue, LoopFX, announced plans to integrate its matching engine technology into FactSet's Portware trading platform in early 2024. The solution primarily allows for the reduction of transaction costs for transfers exceeding $10 million and accelerates the execution of orders.

LoopFX to Integrate into FactSet's Portware Trading Platform

Portware, a multi-asset execution management system used by leading asset managers, will embed LoopFX's functionality directly into client workflows. This will give Portware users easy access to LoopFX's pool of peer-to-peer and bank liquidity for large spot FX trades.

"We are delighted to partner with FactSet and bring the benefits of our dark pool Dark Pool Private exchanges that are not accessible by the investing public for trading securities are known as dark pools.Dark pools are named due to their lack of transparency and occasional predatory trading practices that are performed by high-frequency traders. These exchanges originally into existence towards the end of the 1980s as a way to better facilitate block trading performed by institutional investors. Why Use Dark Pools?Dark pools are used primarily by large-scale investors who do not seek Private exchanges that are not accessible by the investing public for trading securities are known as dark pools.Dark pools are named due to their lack of transparency and occasional predatory trading practices that are performed by high-frequency traders. These exchanges originally into existence towards the end of the 1980s as a way to better facilitate block trading performed by institutional investors. Why Use Dark Pools?Dark pools are used primarily by large-scale investors who do not seek Read this Term matching engine to Portware's global client base," said Blair Hawthorne, the Founder and CEO of LoopFX. "This integration will further expand access to our anonymous midpoint liquidity."

LoopFX's matching engine sources block liquidity and matches asset managers to banks at the independent market mid-rate. This reduces trading costs and improves execution for FX trades over $10 million.

"We look forward to providing our clients with direct access to LoopFX's innovative trading solutions within their existing Portware workflows," Chris Matsko, the Head of FX Trading Services at FactSet, added.

Backed by experienced industry executives, LoopFX serves both the buy-side and sell-side by centralizing dark pool P2P matching with bank interest in a "Peer-to-Bank" model.

For LoopFX, this is another major integration following the September announcement by State Street Corporation that its FX Connect platform has partnered with the venue for large spot foreign exchange trades.

P2P in Institutional Forex Market

The trend of executing FX trades directly between two entities, bypassing traditional market routes, has gained traction over the past decade. This shift has encouraged various platforms to incorporate P2P services.

However, it became apparent that even leading banks were matching only a small fraction of their trades. Additionally, it was noted that clients prioritized favorable pricing over the specifics of trade execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term. This insight led prominent providers to reevaluate and move away from P2P models.

Despite these obstacles, LoopFX is trying to establish itself as a central hub for substantial spot FX trades. LoopFX prides itself on a distinctive matching engine, designed with an open architecture approach. This technology is tailored to seamlessly integrate with existing trading platforms, ensuring minimal disruption to current workflows and requiring only slight modifications to legal documentation.

"Our mission is to provide the means for all large orders to find matches with zero market impact, which includes orders from banks and by default also from the customers of those banks," said Hawtorne. "Doing this without changing asset manager workflows or legal agreements removes a common pitfall to wide scale adoption."

The platform aims to change the way large FX trades are conducted by simplifying and streamlining the process. The question is whether large institutions will be interested.