Scaling FX liquidity post-brokerage acquisition

asked by u/hafiz.pratama · 22d · 2 answers

We recently acquired a small retail FX brokerage primarily for their client book, but their existing liquidity setup is proving quite constrained for our growth projections. The spreads are acceptable on major pairs, but tier-2 and tier-3 pairs are showing too much slippage at even moderate size, leading to client complaints. We're looking at alternatives to our current prime of prime setup, potentially direct tier-1 relationships if the volume justifies, but the onboarding and KYB for some of these larger institutions are notoriously cumbersome. Curious if anyone here has navigated a similar infrastructure upgrade without significant operational disruption.

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  • u/felipe2· 1 pts· 22d

    That's a common challenge post-acquisition. Have you considered whether the slippage is a direct liquidity issue or potentially related to their existing aggregation technology? Sometimes better smart order routing can mitigate some of those tier-2/3 pair issues without needing to completely overhaul the PoP setup.

  • u/fengliu· 1 pts· 22d

    It's always a balancing act with tier-2/3 pairs. Have you considered whether the client base itself is generating sufficient volume in those pairs to justify the cost of significantly deeper liquidity, or if it's a few large outliers driving the complaints?

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