Best Execution spoke to Tom San Pietro at multibank FX price streaming services provider FXSpotStream about their latest evolutionary step forward. Tom joined FXSpotStream six years ago as CTO after serving as Head of FX Trading Venues for Thomson Reuters. He now sits as the interim CEO and has steered the company through a change to its pricing model which had been in place since day one.
What does the new model look like?
We have introduced flexible payment options for our liquidity providers (LPs), allowing them to choose between a subscription model, a brokerage model, or a hybrid that includes a smaller subscription fee, with a favourable rate card on top of that. For our LPs it is the first time they have been able to select their payment plan based on their business and highlights our willingness to listen to their needs and structure our business around them.
There are a number of possibilities this opens the door to, and we are very bullish about the move.
How has the change been received?
We approached the situation with honesty and understanding, and I think that what we came out with was a better, more inclusive solution that benefits everyone.
While this has led to an increase in costs for LPs, we have worked closely with them to communicate the value in this model and develop a rate card that reflects the value of the service rather than simply covering costs.
Has anything changed for clients?
For clients, nothing changes. They still pay nothing to access the liquidity of as many of our 15, tier 1 liquidity providing banks that they may have a relationship with.
Our dedicated team handles the heavy lifting when it comes to setup and onboarding, making the process as efficient as possible for clients and LPs. In fact, adding a new LP is as easy as flicking a switch, giving clients real flexibility on who they do and do not see pricing from.
With changes to the pricing model, could this open the door to new LPs on the service?
There has been a growing demand from clients for more choice in the liquidity they were seeing, and we know that those clients are going to work with those LPs regardless of whether they see them over FXSpotStream (FSS) or not.
Now, with a variety of pricing models, we can have the conversation with potential new LPs and address the client demand for variety in their liquidity pool and we are currently in talks with a number of LPs about joining the service.
We know that the best way for any of our clients to do their business is to access all their liquidity via one service and this is another step towards FXSpotStream being that solution.
Since we last spoke, you have added support for the entire algo suite of the FSS LPs. What has the feedback on that project been?
Taking the entire algo offering of 14 LPs and normalising everything over one API was a tremendous amount of work and something we are very proud of. We have since added all algos to our GUI and made several enhancements after listening to feedback from our clients.
As with all product additions, we understand that the benefit is twofold. Of course, we have a strong client base and adding new products allows them to bring more of their business to the service. But it also addresses gaps in the offering that may have been sticking points with prospective clients. These additions can sometimes allow new clients to dip a toe, before deciding to move more of their business across after realising the benefits of FSS.
So, what is the next focus for FXSpotStream?
We are now placing a strong emphasis on our new low-latency architecture project.
This has been a long-standing project that we were very excited to roll out. After migrating all LPs, along with a sample of smaller clients, we are extremely happy with the market data we have received. Clients are seeing market data latency times that are really outperforming where we expected them to be and, while we are still working on the max latency times we are looking to deliver, the initial reaction from clients has been very positive and they are excited about the results they have seen so far.
While we wrap up the market data side of the project, work is already underway on the orders aspect and we are hoping to begin that migration by the end of the year.
It sounds like there is a lot going on. How has the team dealt with the changes and the additional workload?
The team have responded extremely well given everything that has been asked of them, and there is real excitement at the prospect of being able to control our technology and the avenues we want to target.
In May we added Jeremy Rose to our team as our Head of Liquidity Management. Jeremy brings with him extensive experience and a proven track record in FX, making him a recognised and respected figure within the FX market.
Jeremy will assume a pivotal position in facilitating strong client relationships and optimising liquidity. This aligns seamlessly with FXSpotStream’s unwavering commitment to delivering exceptional service and fostering mutually beneficial partnerships.
And what are your goals for the future?
It is an extremely exciting time for FXSpotStream. While the idea of generating our own revenue opens doors for us to grow and expand, it also brings with it a certain level of expectation from clients and LPs alike.
The core model and the philosophy of the company will not change. Since day one our aim has been to provide a more efficient and cost-effective way for clients to access liquidity. But with each addition we make, whether that be new LPs, new regions, new staff or new products, we open the possibilities for clients to use FXSpotStream and that is something we are tremendously excited about.
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