DMALINK set to enter testing phase
New independent liquidity pool set to launch within a month DMALINK, an independent electronic trading platform, is set to enter the client-testing phase within the next two weeks, with plans to go live with the 10 signed-up customers in a month's time, the managing partners of the company told FX Week. "The level of fragmentation in the market means some clients find it difficult to find ways to trade with each other," says Michael Siwek, founding partner and global head of sales at the venture. "We set up DMALINK to act as a liquidity bridge between these market participants. We want to connect Europe with North America, North America with Latin America, and also Asia," he adds.
For the starting phase of the project, DMALINK will engage with non-bank liquidity providers, but there are plans to add banks in later stages. The platform will not charge market-makers, while price-takers can decide whether they want to pay a volume-based fee or have the platform costs incorporated into spreads.
"Non-bank market-makers price more aggressively and give clients better spreads," says Ashwind Soonarane, a managing director and head of liquidity at DMALINK. "What's more, their technology is often far superior to what banks have."
The platform will offer spot FX only to begin with, although there are plans to add precious metals later. Credit is arranged by four-way agreements between customer prime brokers and the venue's prime-of-prime provider.
"We haven't run into difficulties around credit," Siwek says. "We can offer the same set-up as some of the more established platforms out there, but we take a boutique approach, which means we are quicker to onboard clients and we have the ability to be agile. That boutique approach and the sustained access to liquidity are the additional value we provide."
DMALINK is targeting its service at institutional clients and professional players, matching price-takers with liquidity providers that fit the client profile.
Soonarane says the platform will look at all types of customers, ranging from high-frequency trading shops to asset managers, giving them a "completely different" experience.
"We don't want thousands of clients, and we will only onboard ones where we feel it's right and the client can benefit from DMALINK," he concludes.