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The FoXy’s: Profit & Loss Readers’ Choice Awards Profit & Loss readers cast large numbers of votes this year for their preferred market makers and service providers. Last year was the first that we changed the category description from banks to market makers to account for the larger proportion of non-banks that now comprise an important part of market making, and this is again reflected in the results. The industry’s changing dynamics are starting to show. Voting, which spanned across time zones, was close in many categories, so we have listed the top three for each category to acknowledge the runners up.
The FoXy’s: Profit & Loss Readers’ Choice Awards Profit & Loss readers cast large numbers of votes this year for their preferred market makers and service providers. Last year was the first that we changed the category description from banks to market makers to account for the larger proportion of non-banks that now comprise an important part of market making, and this is again reflected in the results. The industry’s changing dynamics are starting to show. Voting, which spanned across time zones, was close in many categories, so we have listed the top three for each category to acknowledge the runners up.
A Last Look at Last Look? There is one area of the Global Code of Conduct that continues to attract controversy, and, Colin Lambert says, we all know what it is… Although the assessment is a little harsh given the type of misconduct that led to the creation of the FX Global Code of Conduct, it is hard not to understand where the head of e-FX trading at a major bank in London is coming from when they note, “The Code had one job – give us clarity on last look – and it has failed miserably.” There remains the odd voice still raising concerns about Principle 11 and its apparent endorsement of pre-hedging, however, Guy Debelle, chair of the FX Working Group that created the Code, stresses this Principle is really about the “demonstration effect”.
Euronext and FastMatch: the Perfect Combination? As reported earlier, European exchange group Euronext is buying a majority stake in FX ECN FastMatch. Not only is this a deal that has long been rumoured (only the identity of the buyer was unknown) it also appears to be a deal that makes a great deal of sense. Euronext is buying a 90% stake in an FX ECN that is seeing tremendous volume growth – the first four months of 2017 have seen average daily volume of $18.1 billion compared to $11 billion the same time in 2016 – and FastMatch is gaining access to a potentially huge distribution network.
Ready for Launch Profit & Loss talks to David Puth, CEO of CLS and Chairman of the Market Participants Group (MPG), about how the FX Global Code of Conduct will work. Profit & Loss: What was the process like to develop the Code from start to finish? Were there challenges in achieving consensus amongst so many different market participants? David Puth: The development of the Code has generally been a constructive process. The committees involved in its creation are: the FX Working Group (FXWG), which is the central bank working group; the Market Participants Group (MPG), which is the group that I chair; and a number of industry groups, including regional FX committees.
A New Dawn? May 25 marks the release of the full FX Global Code of Conduct, an event that has been much anticipated in FX circles. What will the Code bring to the FX industry and what are the key changes likely to be experienced by participants? Colin Lambert finds out. It all starts – and to a degree ends – with Annex Three, which sits at the end of one of the more important documents released in the FX industry. A lot has been debated and speculated over as the FX Code of Conduct has been developed by the Bank for International Settlements’ FX Working Group
Hotspot: A Fresh Approach Following hot on the heels of its second ownership change in a relatively short time, Hotspot is maintaining the momentum of change by launching new products, specifically outright deliverable forwards. It has also announced a raft of new hires and sought to broaden its geographical footprint. Galen Stops speaks to senior staff at the platform about what these changes - which include the addition of non-deliverable forwards to the platform - are building towards, as well as their view on the changing FX market structure.
Why Have FastMatch Volumes Spiked? There have been some raised eyebrows in the FX industry recently amongst those that have noticed FastMatch’s sudden spike in volumes. Profit & Loss has previously noted FastMatch’s strong start to the year in terms of average daily volumes (ADV), highlighting that in March it reported an ADV of $19.2 billion for the month, a new record high and almost double the $10.1 billion ADV it registered in March 2016. Then in April it set another high water mark in ADV terms, eclipsing March’s record with ADV of $19.8 billion in April, up 83.3% from April 2016.
Sucden Targets Growth Through Diversity Following the launch of Sucden Financial’s new OTC FX options service, Galen Stops talks to Noel Singh, head of e-FX business development at the brokerage, about how it’s planning to diversify its FX offering. Despite having an FX franchise that is over 30 years old, an e-FX offering that has been around for more than eight years and a balance sheet of over $100 million, Sucden Financial is not exactly a household name in the wholesale FX market. But the firm is now working to change that as it seeks to diversify its FX business in response to changing market conditions.
CME Europe, What Went Wrong? Six years after launching CME Clearing Europe and three years after launching CME Europe, the Chicago-based exchange group has announced that it will shut both operations at the end of this year. Although the move was something of a surprise, Galen Stops discovers there are some compelling reasons why the initiative failed. He asks what went wrong and what does this move mean for CME's remaining European operations as well as the ongoing efforts by its competitors to get a European FX derivatives business off the ground?