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FX trading market heats up with 360T expansion
(Pictured: Greg O’Sullivan)
The foreign exchange trading platform provider 360T is expanding in Australia with the recruitment of a Sydney-based executive to concentrate on super funds and other fiduciary investors. Greg O’Sullivan will be taking on his old employer, State Street, in the new role.
Visiting Australia last week from his Singapore base, the Australian-born co-founder of 360T, Matthew Kuppe, said O’Sullivan’s appointment was a natural progression and followed a similar expansion into the asset-owner client base in other regions.
360T was started in Germany in 2000 and opened in Australia in 2006. Sally-Anne O’Keefe built the Australian and New Zealand business, consisting of 55 clients from Melbourne, concentrating initially on the corporate and bank market. She will continue in that role. O’Sullivan, who left State Street last year, where he was head of sales for securities services, will report to Simon Wynn, regional head of sales in Singapore.
As an FX trading platform, its main competitor in Australia and some other markets is State Street’s FX Connect, which maintains a dominant position, especially in the funds management sector.
Kuppe says: “About four years ago we decided to more aggressively focus on the funds management segment… We’ve been working on interfaces and so on and now we’ve matured enough to offer a really valuable product. Now’s the time for super funds and managers in Australia to focus on the cost savings they can achieve from more efficient FX trading. There is still some complacency but it’s shifting because of the low-return environment.”
The 360T system offers savings from two sources: a multi-bank auction system to obtain the best rate and an electronic trading platform to allow for almost instantaneous decisions and execution.
An example of what a multi-bank auction can do was explained by Jonathan Green, the head of investments at NSW T-Corp, at the IO&C Conference in Shanghai this year. He said that by moving to a bank panel for its FX, his fund had reduced its average FX transaction cost from 30 pip (an FX term for one-tenth of a basis point) to 5 pip.
Kuppe says that moving from manual to electronic would further reduce that to about 1 pip, but the cost saving has to do with the volume of transactions and how efficient you already are in your execution.
“We have made the banks compete,” he says. “Our system is transparent and honest. We are buy-side driven. Other platforms are bank driven.”
Pension funds make up about 10-15 per cent of the client base for 360T’s European business, which in turn accounts for about 70 per cent of its business worldwide.
