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May 24th, 2022

Buy side firms wishing to access FX liquidity in today’s markets face a number of challenges. This is particularly true if they are managing a multi-asset fund, running strategies that include an FX component operating alongside other asset classes.

The FX market is highly fragmented and comprises multiple trading venues. These include aggregators, multi-dealer platforms, and banks’ own single-dealer platforms, all offering competing prices. This can be difficult for firms to navigate, as accessing FX liquidity across platforms, across brokers and banks, and across venues often requires multiple systems and interfaces. For traders, having to constantly shift between different screens for each platform is inefficient, and it becomes even more cumbersome for firms that use different platforms for each asset class they trade, e.g. futures, fixed income, equities, etc.

Problems arising from fragmentation

The fact that the FX landscape is so fragmented means that buy side firms may not always be able to access optimum FX liquidity, because they are unable to see the top-of-book across the market. This fragmentation can also restrict the effectiveness of execution algos, which are often restricted to specific brokers or platforms.

The problems are exacerbated in a multi-asset environment. Firms that have to rely on multiple systems for different asset classes face difficulties when it comes to cross-asset hedging, risk control, analytics, and reporting. This is because not only do those systems need to be able to communicate with each other in real time, but also because the multi-asset functionality of those systems may be limited.
Systematic traders in particular can also be hindered by the fact that they have to interface with multiple APIs from different providers. It can also be costly and resource-intensive to build and maintain these interfaces.

So how can these challenges be addressed?


A single, consolidated multi-asset platform

This is achievable with the appropriate technology, such as that offered by TORA. TORA’s all-in-one multi-asset order execution management system (OEMS) now provides access to multiple FX liquidity pools, together with other asset classes, through a single platform. With TORA, users can connect to multiple FX trading platforms, banks and brokers, and see a true top of book across FX spot, forwards, swaps and NDFs, side by side with all other global asset classes.

TORA’s integration with multiple FX liquidity pools (including EBS, CBOE HotSpot, Refinitiv FX Matching, EuroNext FastMatch, Fenics), together with access to individual bank FX Algos offers a whole new array of possibilities for firms when managing strategies or portfolios with an FX component. For example, if a currency exposure arises from a pairs or basket trade, it can be offset automatically through an FX hedge transaction in the appropriate FX liquidity pool. This is a much more efficient process than having users switch between platforms to execute trades.

Pairs Trading

Pairs trading is a great example of where TORA’s multi-asset, multi-currency, multi-broker functionality can add value, as it allows clients to trade the FX leg of a pairs transaction away from the counterparties used for the other legs, which can help with reducing trading costs and keeping anonymity. This is particularly useful for clients trading FX and other asset classes such as equities and derivatives. Clients can use TORA’s pairs trading tool to efficiently create spot/futures basis trades much more efficiently, where managing positions and risk previously was a much more manual process.


Systematic traders also benefit from the fact that TORA is designed from the ground up as a cross-asset, broker-neutral open platform, with a highly performant, well-documented set of APIs. This means that clients can seamlessly pull data into their own alpha generation models from TORA, and push trading instructions algorithmically back into the market, through the appropriate liquidity channel. At the back end, clients can also access any of their transaction, position, portfolio, or time series data via API, to build reports for investors, customers, regulators and counterparties. And they can slice and dice that data as they wish.


In conclusion, TORA’s all in one cross-asset OEMS platform offers many benefits to firms trading FX, regardless of whether they are a new start-up hedge fund or an established institutional asset manager with multi-billion dollar AUM. As well as providing clients with access to top of book FX liquidity across the board alongside other asset classes, TORA helps firms navigate today’s highly fragmented FX market by providing a single sign on, a unified interface, standardised API and advanced trading technology, offering comprehensive cross-asset functionality not just for FX, but across asset classes.