HSBC Launches New FX NDF Algo Suite with Asian Currencies

HSBC’s FX Alternative Execution Services has extended its non-deliverable forwards (NDF) algorithm suite by launching a new offering called NDFlex.

The suit will add pairs of five Asian currencies initially – Indonesian rupiah, Indian rupees, Korean won, Philippine peso, and Taiwan dollar – against the US dollar. The new product is similar to the bank’s algorithm offering for G10 currencies.

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According to a Profit&Loss report, using the new algo suite, implementation shortfall, liquidity seeking, TWAP, VWAP, get done, and liquidity plus strategies can be deployed. The access liquidity from the EBS platform as well as the bank’s own liquidity pools.

Though the algorithm suite will be initially available on BidFX and Bloomberg, the bank has plans to add it to more platforms in Q4 2020.

“We have been working on developing the NDF algos for about six months with our clients,” Vivek Sarohia, HSBC’s new global head of FX alternative execution services said. “We have seen, like our peers, a significant uptick in demand for algos and this gave us the validation to expand our offering into emerging markets, which is a strong suit of HSBC.”

He also revealed that the algos were live for testing since July and received positive feedback from its clients.

“Our clients wanted a product that was as flexible as possible in terms of how they select their strategies and liquidity sources, as well as what tenors they can trade. Emerging market liquidity provision is a specialty of HSBC and NDFlex is a key development as we evolve our service in these markets,” he added.

Increasing demand for NDFs

With the increasing demand for NDFs, many major global players are now adding the instruments for their clients. Only a couple of weeks earlier, Finance Magnates reported on Barclays’ addition of similar NDF algorithms on the BARX electronic trading platform.

HSBC is also considering entering the LatAM markets, especially Brazil, with similar NDF offerings.

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