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Editorial: Are Last Look’s Chickens Coming Home to Roost? Few can be surprised that such an increasingly emotive issue such as last look has led to a lawsuit. As someone who has disliked the practice for more than a decade and written about the risks associated with the regular rejecting of trades for more than seven years this class action lawsuit is not surprising – but I cannot help avoid the feeling that this is both someone trying it on, while at the same time it is the worst case scenario for the defendants.
Indian Public Sector Firms Adopt FXGO Bloomberg is reporting growing penetration of the Indian market, with corporations such as Gas Authority of India (GAIL), Rural Electrification Corporation (REC) and ONGC Videsh (OVL) adopting its e-FX platform, FXGO. GAIL is the largest state-owned natural gas processing and distribution company in India, REC is a leading public infrastructure finance company in India's power sector and OVL is India's second largest oil company. The corporate treasury desks at GAIL, REC and OVL are using Bloomberg FXGO to analyse trade ideas, request quotes, execute, and perform post trade analysis, all on a single electronic platform.
INTL FCStone Enhances Small Payments Business INTL FCStone has announced that the Global Payments Division (GPD) of its London-based subsidiary has introduced Automated Clearing House (ACH) connectivity, enhancing the company’s high-volume, low-value cross-border payments offering. Low-value payments are the single largest driver of growth in GPD’s payments volumes, which are currently 60% up year-on-year, the firm says. In order to support this increasing demand, the firm launched an initiative to securely access a greater number of global ACH low-value clearing systems. “In the past, how a payment was sent and what the cost of sending it was didn’t matter as much because the absolute value of that payment was usually relatively high. But today, as payments become smaller and smaller, it becomes more and more important to build networks that are cost effective,” Carsten Hils, the global head of GPD, tells Profit & Loss.
US to Replace Libor The US appears to have settled upon a reference rate to replace the current London Interbank Offered Rate (Libor). At a meeting last week, the Alternative Reference Rates Committee (ARRC) identified a broad Treasuries repo financing rate, which the Federal Reserve Bank of New York has proposed publishing in cooperation with the Office of Financial Research (OFR), as the rate that, in its consensus view, represents best practice for use in certain new US dollar derivatives and other financial contracts.
Vela to Acquire OptionsCity Trading and market data technology provider Vela Trading Technologies has entered into a definitive agreement to acquire OptionsCity Software, a provider of futures and options trading and analytics solutions. Vela says the acquisition will expand its front-office capabilities to include analytics and risk management tools, enhance its market access managed services with additional trading and content solutions, and accelerate its data cloud strategy. The acquisition will also accelerate OptionsCity’s growth strategy, the firm adds, providing its clients with access to additional asset classes, trading venues, geographies, low-latency data feeds, and market access products.
RMB Internationalisation: Opportunities and Challenges Celent has released a report today that documents the progress being made in the internationalisation of the renminbi (RMB), and outlines the opportunities that this represents for market participants, as well as the challenges it presents. Discussing how investment managers can benefit from RMB internationalisation, the report says that they should consider adopting new strategies to respond to greater short-term volatility in the currency. It notes that investment managers have traditionally looked to gain from China’s one-way currency appreciation and hold bonds till maturity. “But Chinese regulators’ abandonment of circuit breakers and other protective measures means traditional expectations of regulatory intervention may not hold going forward, opening up more opportunities for short-term price fluctuations,” says the report.
AxiomSL Hires Weisberg in Advisory Role AxiomSL, a firm that provides enterprise-wide technology and solutions for risk and regulatory reporting, and data management, hired Phil Weisberg as an advisor. This is the first role that Weisberg has taken since leaving his position as managing director, global head of FX, rates and credit at Thomson Reuters, in November 2016. Weisberg spent four years at Thomson Reuters, joining the firm when it bought FXall in 2012, where he had been CEO since the firm launched in 2001. Prior to starting FXall, Weisberg worked at JP Morgan between 1989 and 2001 in a variety of FX-focused roles.
Cartel Traders Agree to US Extradition Court documents filed in New York this week indicate that three members of the notorious “Cartel” chat room have agreed to extradition to the US to be arraigned on charges of conspiracy to rig FX markets. In a letter, the US Department of Justice (DoJ) states, “We are writing to confirm that each of the three defendants in the above-referenced case – Richard Usher, Rohan Ramchandani, and Christopher Ashton – have agreed to voluntarily appear before the Court on the charge brought against them by indictment in January of this year.
Second Former HSBC FX Trader Arrested Stuart Scott, formerly head of FX trading EMEA at HSBC, has been arrested in London and appeared in court to face extradition to the US over allegations of front running and insider trading relating to the bank’s handling of a large order for one of its customers. Last year, Mark Johnson, global head of FX trading at the bank was arrested in New York over the same allegations and also faces charges of front running. Scott was arrested following a formal extradition request by the US Department of Justice (DoJ) and was bailed following the court hearing.
FX Markets Stable as UK Heads for Hung Parliament After an initial 1.7% drop when the exit poll was released in the UK predicting a surprise hung parliament after the UK general election, FX markets have stabilised with Cable ranging around 1.2750 and EUR/GBP around 0.8780. Market sources say volumes have dropped from the earlier high levels as uncertainty over the outcome reigned, however the market appears to have come to terms with a minority government. BBC predicts the Conservatives will win 318 seats, with Labour in second place on 262 and analysts at the broadcaster say there is “no way” that a hung parliament can be avoided.