Electronic FX in Latin America Gearing up for a decade of growth ahead

Regulation as well as culture has a big part to play – both negatively and positively. On the one hand,
“Demand is still low due to regulatory and policy restraints and culture,” explains Alex Scarsini, co-founder and president of New York based Edgewater Markets LLC, the institutional currency trading venue with more than 300 institutional clients around the world. “There is also a gap in internal expertise for such products. Corporations and pension funds don’t trade FX as an asset class and generally don’t value e-services as much as a bank would. That segment of the market still prefers to trade over telephone or chat rooms and request for quote (RFQ). Very few local corporates use single bank platforms. White label solutions are also still relatively few.” However, regulation and changing cultures are also upping the pace of change. Institutions, particularly pension funds and asset managers, are coming under pressure to prove best execution and adopt greater transparency. Brazil and Mexico are leading the way according to Juan Carlos Escalera head of wealth and trading LatAm at Refinitiv who also sits on the Mexican Central Bank’s FX Committee.

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