Two UK start-ups aiming to accelerate the evolution of the foreign exchange market structure have announced a partnership agreement.
BestX, a financial technology company that has developed a suite of FX Best Execution Analytics, is partnering with Cobalt, the FX post-trade processing network based on distributed ledger technology.
BestX is the first TCA & Analytics provider to connect with Cobalt’s BlueSky service, enabling clients of both firms to independently validate client trades and define, achieve and demonstrate best execution through Transaction Cost Analysis (TCA).
Pressure for independent analytics in FX has increased over the past year, driven by MiFID II compliance, regulatory focus on transparency, as well as a more activist ‘Asset-Owner’ community that wishes to see evidence of best execution across all FX trades.
The Cobalt BlueSky service is the secure repository of unique shared FX contracts and the staging area for life-cycle events, risk reduction and preparation of trades for settlement finality. Cobalt BlueSky enables third party technology providers to facilitate and develop their own applications based on access to the database of confirmed, reconciled and matched transaction data created by the Cobalt network.
“This is another great example of the versatility of the Cobalt BlueSky shared ledger”, says Adrian Patten, Co-Founder and Chairman of Cobalt, “demonstrating how we can enable our customers to seamlessly use their FX data with the best-in-class FX Analytics product as demanded by the market today”
BestX was formed in January 2016 by Morgan Stanley alumni Pete Eggleston, Oliver Jerome & Aman Thind. Since then, many of the world’s top 100 asset managers & hedge funds have adopted its FX performance measurement tools, as well as a number of major sell-side institutions.
“Cobalt is setting the benchmark for the FX industry with its shared post-trade infrastructure, with 22 banks and traders signed up” said Ollie Jerome, Co-founder of BestX “There is no doubt that this partnership will help BestX further our goal of being the industry standard for FX TCA.”