DBFX

Last updated • 5 min readFrom Wikipedia, The Free Encyclopedia
dbFX
Type Private
Industry Financial services
FoundedMay 2006 (2006-05)
DefunctMay 17, 2011 (2011-05-17)
Headquarters London, England
Products Foreign exchange
Parent Deutsche Bank
Website www.dbfx.com

dbFX was Deutsche Bank’s online margin foreign exchange trading platform and service for individual and institutional investors including financial institutions, hedge funds, corporations, asset managers, money managers, commodity trading advisors, broker-dealers, brokerage firms, high net worth individuals, and sophisticated and professional traders, which operated from 2006-2011. [1] [2] [3]

Contents

In 2006, Deutsche Bank, then the world’s largest provider of foreign exchange trading by global market share, [4] became the first global bulge bracket investment bank to offer institutional foreign exchange trading through an online margin FX trading platform. [5]

The state of the art dbFX platform [1] was a new and innovative technology at the time, which marked a paradigm shift from over-the-phone trading, to instantaneous online trade execution, at a reduced cost and risk, thus creating a de facto new asset class, and opening up, disrupting, and democratizing access to the global FX market. [5]

On June 1, 2006, Euromoney, a leading institutional investor and international finance magazine, provided the context for the disruptive nature of Deutsche Bank’s dbFX platform.

“Deutsche Bank’s dbFX platform, formally announced on May 15, appears to herald a new phase. Deutsche’s move has got tongues wagging about which bank will be next. Gossip suggests it will be UBS. Direct access to the [FX] market has generally been over the phone.” [5]

Three years later in 2009, Citibank, currently the world's largest provider of foreign exchange, [6] initiated a competitive response to Deutsche Bank's dbFX platform called CitiFX Pro, [7] [8] thus becoming the second multinational bulge bracket investment bank to launch an online institutional foreign exchange service on a margin foreign exchange technology platform.

History

Deutsche Bank was founded in 1870 as a specialist bank for foreign trade. In October 2001, Deutsche Bank listed its stock on the New York Stock Exchange, the first NYSE listing after the September 11 attacks. From 2002-2005, Deutsche Bank expanded rapidly through acquisitions of Rued Blass & Cie private bank, German Norisbank, Berliner Bank, and Deutsche Postbank, and Russian investment bank United Financial Group, achieving a target return on equity of 25%, and becoming one of the world's nine largest bulge bracket investment banks, and the world's largest foreign exchange provider. [4] [9]

By mid 2005, Deutsche Bank was in search of new and innovative ways to continue growing its global presence, and its market share of global foreign exchange trading, while meeting the increasing client demand for streamlined access to capital market products. [10]

Launch

The idea for dbFX came from the executive management of one of Deutsche Bank's largest clients, FXCM, then the market leader in online margin FX trading, with a growing institutional footprint. A team led by Senior Managing Director Jayme Illien successfully proposed and structured a global strategic partnership with Deutsche Bank to establish and launch dbFX. [1] [2] [11] [12] [13]

dbFX was initially launched with 10-20 countries with Illien as the founding global head of dbFX. He hand-picked, trained, and led a global cross-functional team across sales, trading, risk management, research, compliance, operations, and technology to launch and expand dbFX into 180+ countries, legal and regulatory jurisdictions, and nine languages. [14]

dbFX offered the ability to trade on “one click” real time streaming executable quotes 24 hours a day at spreads as low as 1.5 pips on 34 currency pairs directly from the interbank market, the 1000 largest and most active foreign exchange banks in the world. [1] [15]

Deutsche Bank was the counterparty to all trades. All client funds were held at Deutsche Bank AG and protected by the Deposit Protection Fund of the Association of German Banks.

From 2006-2008, dbFX became the fastest growing business within Deutsche Bank, and a major contributor to Deutsche Bank's reign as the world's largest provider of foreign exchange trading from 2005-2013. [16] [17]

Many of the original dbFX leadership and team are now CEOs, managing directors, global heads, and senior executive leaders at the world's leading fintech companies, hedge funds, FX desks, and global financial institutions. [18] [19]

Closure

Against the backdrop of the global financial crisis of 2007-2008, and the subsequent changing regulations of global financial markets, including the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, and the Basel III capital and liquidity standards, Deutsche Bank decided to discontinue dbFX, and a portion of dbFX business was acquired by Gain Capital, a leading global provider of online trading. [20]

Deutsche Bank released a statement about dbFX:

“dbFX volumes grew every year since 2006 culminating with 2010 volumes 56% higher than 2009. dbFX has been a strongly performing business for Deutsche Bank but has reached a point where in order to reach its full potential it requires significant investment in specific resources which are not consistent with Deutsche Bank’s current strategic initiatives.”

Speculation about why Deutsche Bank sold dbFX to Gain Capital has ranged, and included new global markets and financial regulations, lower corporate risk tolerance considering the bank's losses and exposure to the housing credit bubble and subprime and CDO market, Deutsche Bank management changes in response to the global financial crisis, and issues regarding competitive threats to profitability with incumbent Deutsche Bank businesses. [21]

Services

dbFX clients received access to award-winning multi asset Deutsche Bank research including in depth economic resources, special forex reports, and daily reports covering economic developments, real time FX news and market commentary. dbFX clients could also trade directly from charts, connect to dbfx by API, implement algorithmic, black box, automatic, and artificial intelligence based trading programs, invest with Deutsche Bank FX select portfolio of money managers, as well as access trading in multiple asset classes including equities, equity derivatives, and commodities trading. [22]

Trading platform

The dbFX trading platform was provided under a global strategic partnership from FXCM and was available in nine languages including English, Chinese, Arabic, German, Spanish, French and Russian. Features included integrated charts, hedging with no FIFO restrictions, different order types, real-time account summary and 24-hour reporting. [1]

Related Research Articles

A custodian bank, or simply custodian, is a specialized financial institution responsible for providing securities services. It safeguards assets of asset managers, insurance companies, hedge funds, and is not engaged in "traditional" commercial or consumer/retail banking like lending. The role of a custodian in such a case would be to:

Saxo Bank

Saxo Bank is a Danish investment bank specializing in online trading and investment. It was founded as a brokerage firm in 1992, under the name Midas Fondsmæglerselskab, by Lars Seier Christensen, Kim Fournais, and Marc Hauschildt. The name was changed to Saxo when the company obtained a banking license in 2001. Saxo offers trading through its online platforms in Forex, stocks, CFDs, futures, funds, bonds, and futures spreads. The company functions as an online broker with a bank license, without offering traditional banking products. According to Saxo, roughly half of its activities are derived from partnerships with institutional trading partners. More than 100 financial institutions globally service their end clients with Saxo Bank's platforms on a white-label basis

Direct market access (DMA) is a term used in financial markets to describe electronic trading facilities that give investors wishing to trade in financial instruments a way to interact with the order book of an exchange. Normally, trading on the order book is restricted to broker-dealers and market making firms that are members of the exchange. Using DMA, investment companies and other private traders use the information technology infrastructure of sell side firms such as investment banks and the market access that those firms possess, but control the way a trading transaction is managed themselves rather than passing the order over to the broker's own in-house traders for execution. Today, DMA is often combined with algorithmic trading giving access to many different trading strategies. Certain forms of DMA, most notably "sponsored access", have raised substantial regulatory concerns because of the possibility of a malfunction by an investor to cause widespread market disruption.

<i>Euromoney</i>

Euromoney is an English-language monthly magazine focused on business and finance. First published in 1969, it is the flagship production of Euromoney Institutional Investor plc.

Matchbook FX

Matchbook FX was an internet-based electronic communication network for trading currency online in the Spot-FX or foreign exchange market. It operated between 1999 and 2002.

UBS Multinational investment bank

UBS Group AG is a Swiss multinational investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres as the largest Swiss banking institution and the largest private bank in the world. UBS client services are known for their strict bank–client confidentiality and culture of banking secrecy. Because of the bank's large positions in the Americas, EMEA, and Asia Pacific markets, the Financial Stability Board considers it a global systemically important bank.

City Index is a spread betting, FX and CFD Trading provider based in the UK. City Index is part of GAIN Capital and is regulated by the Financial Conduct Authority as Gain Capital UK Limited with registration number 113942. The company is headquartered in London and has offices in the United Kingdom, Australia, Hong Kong, China, Singapore, Poland and Dubai.

OFX (company)

OFX, previously known as OzForex is an Australian online foreign exchange and payments company with headquarters in Sydney. The company provides money transfer services to Travelex, MoneyGram, Xero, Capital One 360, and Macquarie International Money Transfers as well as individuals such as migrants and expatriates and small businesses.

FXCM, also known as Forex Capital Markets, is a retail foreign exchange broker for trading on the foreign exchange market. FXCM allows people to speculate on the foreign exchange market and provides trading in contract for difference (CFDs) on major indices and commodities such as gold and crude oil. It is based in London.

GAIN Capital is a US-based provider of online trading services, headquartered in Bedminster, New Jersey. The company provides market access and trade execution services in foreign exchange, contracts for difference (CFDs) and exchange-based products to retail and institutional investors. Trading is provided via one of two electronic trading platforms, its own proprietary FOREXTrader PRO, or MetaTrader 4. GAIN Capital allows retail and institutional clients to speculate on global foreign exchange markets in what is known as ‘margin forex trading’.

CitiFX Pro

CitiFX Pro was Citigroup's online foreign exchange market trading platform for retail and small institutional traders including commodity trading advisors, broker-dealers, money managers, and hedge funds. CitiFX Pro discontinued offering services to clients in June 2015 and sold all U.S. accounts to FXCM, and international accounts to Saxo Bank.

Hirose Financial UK Ltd. is a UK-based retail foreign exchange broker that provides foreign exchange trading on margin through its own online trading platform called LION Trader. It is a subsidiary of Japanese FX company Hirose Financial that provides online trading solution to forex traders.

FXDirectDealer, LLC is a provider of foreign exchange trading for retail and institutional clients. The company provides access to the spot foreign exchange market through proprietary and third-party trading software, including: MetaTrader 4, FXDD Swordfish, PowerTrader, VikingTrader, Mirror Trader, and JForex.

The forex scandal is a financial scandal that involves the revelation, and subsequent investigation, that banks colluded for at least a decade to manipulate exchange rates for their own financial gain. Market regulators in Asia, Switzerland, the United Kingdom, and the United States began to investigate the $4.7 trillion per day foreign exchange market (forex) after Bloomberg News reported in June 2013 that currency dealers said they had been front-running client orders and rigging the foreign exchange benchmark WM/Reuters rates by colluding with counterparts and pushing through trades before and during the 60-second windows when the benchmark rates are set. The behavior occurred daily in the spot foreign-exchange market and went on for at least a decade according to currency traders.

ActivTrades is a UK-based brokerage firm providing an electronic trading platform to trade Forex, Contracts for Difference (CFDs), and spread betting. It provides services to retail and institutional traders via the electronic trading platforms ActivTrader, MetaTrader 4 and MetaTrader 5.

Integral Forex Turkish-based online brokerage and branch of Integral Securities

Integral Forex, a branch of Integral Securities, is a Turkey-based financial trading services provider specialized in foreign exchange (forex) and contract for difference (CFD) brokerage.

Markets.com, is a global trading and investing brand owned by Finalto Group, the financials division of FTSE 250 listed Playtech. Market.com is an electronic trading platform for trading on the foreign exchange market, commodity market, cryptocurrency market, stock market, ETFs and bonds through Contracts for Difference (CFDs) and in the UK & Ireland, Spread Bets. It is also an investment services provider offering physical share dealing and a quantitative investment strategy builder. Playtech is listed on the London Stock Exchange under ticker PTEC.

XTX Markets is an algorithmic trading company. It was founded on 30 January 2015 by Alexander Gerko who is currently co-CEO alongside Zar Amrolia.

MultiBank Group

MultiBank Group is a global financial derivatives broker specializing in providing markets access to financial instruments, including forex, metals, indices, shares, commodities, and cryptocurrencies CFDs.

Forex Club

Forex Club is a group of companies participating in the retail market of Forex. The Libertex brand operates and its structure includes financial and educational companies.

References

  1. 1 2 3 4 5 Bank, Deutsche. "Deutsche Bank - dbFX". www.cbs.db.com. Retrieved 2018-05-10.
  2. 1 2 "dbFX Deutsche Bank Corporate Linked in page".
  3. ↑ "Bank for International Settlements Triennial survey 2007" (PDF).
  4. 1 2 "Euromoney FX poll 2006 worlds largest FX banks by market share".
  5. 1 2 3 "DBFX platform: UBS targets High Net Worths". Archived from the original on 2018-06-30.
  6. ↑ "Euromoney FX Survey 2017 – results released". Euromoney. Retrieved 2018-05-10.
  7. ↑ "Citi Launches CitiFX Pro". www.citigroup.com. Retrieved 2018-05-10.
  8. ↑ "DBFX platform: UBS targets High Net Worths". Euromoney. Retrieved 2018-05-10.
  9. ↑ "Deutsche Bank HomePage - History Chronicle from 1870 until today" (PDF).
  10. ↑ "Deutsche Bank launches Online Margin FX System". Deutsche Bank. May 15, 2006. Archived from the original on 2009-12-06.
  11. ↑ "dbFX Forex Broker Information". forex.tradingcharts.com. Retrieved 2018-05-10.
  12. ↑ "Deutsche Bank Offers Retail Road To Alternative Investing | FINalternatives". www.finalternatives.com. Archived from the original on 2018-05-11. Retrieved 2018-05-10.
  13. ↑ EconoTimes. "UNIDOHAPPINESS FOUNDER ILLIEN JOINS 2016 U.S. PRESIDENTIAL CANDIDATE BERNIE SANDERS TO DISCUSS AMERICAN POLITICS, NATIONAL AND GLOBAL SECURITY. - EconoTimes". EconoTimes. Retrieved 2018-05-10.
  14. ↑ EconoTimes (2017-11-13). "UNIDOHAPPINESS FOUNDER ILLIEN JOINS 2016 U.S. PRESIDENTIAL CANDIDATE BERNIE SANDERS TO DISCUSS AMERICAN POLITICS, NATIONAL AND GLOBAL SECURITY. - EconoTimes". EconoTimes. Archived from the original on 2018-03-15. Retrieved 2018-05-10.
  15. ↑ "dbfx Forex Broker Review – Currency Trading.net". www.currencytrading.net. Retrieved 2018-05-10.
  16. ↑ "euromoney 2012 fx survey results".
  17. ↑ "Euromoney FX survey 2013 results revealed". Euromoney. Retrieved 2018-05-10.
  18. ↑ Clark, Joel. "An FX view from the top – XTX co-chief Zar Amrolia" . Retrieved 2018-05-11.
  19. ↑ "Exclusive: Anthony Mazzarese jumps from FXCM to Jefferies as SVP FX Prime Brokerage". LeapRate. 2017-05-11. Retrieved 2018-05-11.
  20. ↑ "Deutsche Bank is shutting down dbFX, exiting the retail forex market, transfers clients to Gain Capital | Finance Magnates". Finance Magnates | Financial and business news. 2011-04-21. Retrieved 2018-05-11.
  21. ↑ "Deutsche Bank sells dbFX to Gain Capital - FX Week". FX Week. 2011-04-21. Retrieved 2018-05-11.
  22. ↑ Bank, Deutsche. "Deutsche Bank - dbFX". www.cbs.db.com. Retrieved 2018-05-11.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.