FX: The Rise of Quality Execution Analysis

November 14, 2018 | By: Matthew Halicki

November 13, 2018

A combination of regulatory requirements and commercial imperatives are driving interest in quality execution analysis (QEA), a subset of transaction cost analysis (TCA) that is a vital component in measuring FX best execution.

FlexTrade’s Vinay Trivedi, Senior Vice President, FX Strategic Initiatives, recently spoke with Euromoney’s Paul Golden about the use of quality execution analysis (QEA) in FX best execution.   

From the article:

Vinay Trivedi

Vinay Trivedi, senior vice-president, FX strategic initiatives at FlexTrade, agrees that there is a strong drive to analyse the performance of execution traders from an internal benchmarking perspective.

“While we see institutional investors carrying out such analysis of their custodians’ execution process, many have also started analysing their asset manager and trader performance,” he says, “To take the matter in hand, many funds now have a dedicated execution desk for FX overlay hedging and trading.”

Using the right data set and ensuring data consistency across venues and brokers is vital to the effective use of QEA, says FlexTrade’s Trivedi, as is including some means of using the customers’ objectives to make sense of the huge volume of data available.

“This requires services such as an alerts capability to highlight particular issues that are relevant to that user,” he says. “There must also be a feedback loop so that conclusions derived from TCA are fed back into the trading process – for example, making sure that the post-trade analysis can be used to inform pre-trade decision-making.”

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