Best connectivity, hosting and co-location service: ION MarketFactory

ION MarketFactory discusses its win for best connectivity, hosting and co-location service at this year’s awards

With the fragmentation of the FX market gathering pace, the creation of an industry-wide single point of connectivity to all platforms and venues seems such a remote possibility that connectivity provider MarketFactory has expanded the number of venues and instruments to which market participants can connect with its own single low-latency application programming interface (API).

Known as Whisperer, MarketFactory’s single API to the FX markets was recently given a new lease of life. Whisperer was originally designed when electronic trading in FX markets revolved in large part around spot. The FX market is now more electronified and subject to new regulatory requirements in different jurisdictions. Therefore, MarketFactory decided to rebuild Whisperer from the ground up, to not only include the ability to connect to venues that cater to instruments they previously didn’t support – such as deliverable forwards and swaps and their non-deliverable counterparts – but to also meet the regulatory needs of its clients. The revamped Whisperer has also been future-proofed so that new instruments or order types and future regulatory requirements can be easily integrated into the system.

“The Whisperer rebuild was a huge project,” says Eugene Markman, chief executive of ION MarketFactory. “Instead of just improving it we decided to rebuild it, taking all the lessons we learned from doing it the first time and doing them better the second time around. By applying the lessons learned from the first 10 years of the business, we decided to really improve the product with the ability to scale.

“And scaling is the biggest challenge. The pace of electronification of the FX market is clearly going to continue and the data flow is only going to increase, so we need a system that’s able to scale up and integrate new requirements as they come up. It is an open system that is right for expansion.”

Expansion is already well under way as feeds to 31 new venues were integrated to Whisperer in the last year – including 360T, EBS, Bloomberg, FXall, 24 Exchange, FastMatch, BNP Paribas, Cboe, and LMAX – bringing the total number of venues on which MarketFactory clients can trade to more than 100.

While MarketFactory’s reworked Whisperer is now able to cater for a larger swath of the electronified FX market, the connectivity tool will in time also serve as the connectivity layer for all FX services in ION’s group of companies, including TradAir and Barracuda. While the different companies have largely been integrated into the group since their recent acquisition by ION, bringing all the different products in the group to function as part of a single entity is a work in progress.

“Reorganising companies and the people within them is the easy part,” says Markman, “but getting all the different products to work together as a single company with no friction in integration for clients, that’s the challenge, but also eventually the greatest reward.”

Through recent acquisitions, ION can now provide a wider range of services to its clients, while also recognising it cannot supply all solutions FX market participants might need. To fill any potential gaps, MarketFactory has begun to enter into partnerships with other service providers in the industry to extend these partners’ services to its own clients. For example, in the past year, MarketFactory has entered into partnerships with two analytics firms: Tradefeedr and Ideal Prediction, as well as new partnerships in the pipeline to be made in line with client needs.

“We looked internally and were quite honest with ourselves as to what we can and cannot do,” says Markman. “Similar to the likes of Amazon or Apple we decided that to be able to give our clients the full experience, there are certain things that we’re going to leave to partners. This is definitely a large part of our strategy going forward.”

In the past year, MarketFactory also opened co-location services in Singapore, thus allowing liquidity providers to consume and provide liquidity to the local market, much like the firm already does in New York, London and Tokyo, as well as with CME.

 

ION MarketFactory was voted Best connectivity, hosting and co-location service at the 2022 FX Markets e-FX Awards.

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