The move to a multi-asset class approach

We've already seen some degree of that this year, with banks realigning salespeople, at minimum, away from the silo structure where FX is separate from equities, to take on a more multi-asset class approach to sales. In February, Jason Shell, formerly head of European sales at Deutsche Bank, took on a new position as global head of debt capital markets (DCM) FX. Shell is now responsible for the delivery of FX products to the bank's issuer clients, with the role specifically created to achieve more cross-product selling across the DCM business. Indeed, the keynote speaker on the day, Howard Tai, currency and equity derivatives specialist at American Century Investments, said the days of selling a single product are gone.

Speakers agreed that particularly on the prime brokerage side, clients and dealers will get a better deal from having a cross-asset prime brokerage service. This bodes well for those banks now looking to get into the somewhat mature foreign exchange prime brokerage business, such as Merrill Lynch.

The US investment bank has, over time, built up a fairly strong name in equity prime brokerage. The ability to leverage that relationship will help Merrill break into a market that has seen explosive growth in the past seven years, with now-established players.

Another area that hasn't quite got there, but is thought to be going cross-asset soon, is algorithmic trading. Currently, a number of platforms already enable cross-asset trading using algorithms. According to one speaker, there are already buy-side firms hedging one asset class with another using algorithms. But usage of pure cross-asset algorithms hasn't quite reached any form of critical mass. This is because people still tend to focus on the fundamentals of individual assets in their own right, but it is not far off.

The messaging protocols, for example FIX, are in place. Darren Jer, regional FX sales manager at Icap, said the protocol can be used to trade FX and gold. But the point was also raised that there's a danger for banks offering multi-product platforms, in that each product will not be covered at a high quality.