XTX Markets UK reports lackluster results for 2021

abdelaziz Fathi

The UK business of XTX Markets, a non-bank FX liquidity provider and market maker, has reported its financials for the fiscal year ending December 31, 2021. The report showed impressive metrics after seeing revenues and customer activity increase even as the pandemic trading boom fizzled out.

XTX Markets

In the 12 months to December, the FCA-regulated entity’s revenue was reported at £1.48 billion, up 38 percent from £1.06 billion the same period a year ago.

Per its latest filing with the UK Companies House, the firm’s operations generated a record of £667 million in net profits in 2021 compared with £470 million in 2020.

XTX Markets, the parent entity, has steadily climbed the ranks of electronic market makers, now commanding a significant portion of the spot FX turnover, displacing leading banks such as J.P. Morgan Chase in the process.

XTX Markets sues State Street’s Currenex

Further, XTX Markets was the largest electronic spot FX liquidity provider globally for the second year and was also the largest European equities liquidity provider in 2020 as it continues to build out a growing client franchise.

The use of algorithmic execution tools in foreign exchange has increased significantly as coronavirus-led volatility drives FX traders to seek increased efficiencies in trading.

Alongside other asset classes, the FX market has responded to the COVID-19 pandemic with worrying volatility. As a result, investors looked to so-called adaptive algorithms that are based on the machine learning model that allows incremental learning. This has led the adoption of algos by FX market participants to surge as traders seek a competitive edge.

Earlier in February, XTX Markets joined a class action lawsuit accusing State Street’s Currenex of secretly abandoning the industry-standard “first in, first out” practice to allow certain liquidity providers to “jump in line” and obtain unfair privileges.

The lawsuit filed in the Southern District Court of New York was updated, not only to enable XTX Markets to join as a co-lead class plaintiff, but also to disclose a “shocking breach of trust”. Specifically, the non-bank FX liquidity provider and market maker’s investigations discovered a mechanism by which Currenex provided HC Technologies with administrative access that allowed it to see all orders on the platform.

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