The average daily volume (ADV) of trades submitted to CLS was $1.64 trillion in June, up 6% from $1.55 trillion in May, and up 1.64% year-on-year.
The main driver of this growth appears to have been an increase in swaps and forward activity. Swaps accounted for $1.08 trillion of the ADV submitted to CLS in June, up 9.3% month-on-month and 7.5% year-on-year.
The ADV of $108 billion in FX forwards in June represented a 3.8% increase from the previous month and a 20% growth from June 2016, when an ADV of $90 billion was recorded.
BNP Paribas (BNPP) has agreed a $246 million settlement with the Board of Governors of the Federal Reserve System (FRB) relating to past misconduct in its foreign exchange business.
The settlement will be covered by existing provisions. This follows the announcement by BNPP of a settlement with the New York State Department of Financial Services on the 24th May relating to the same issue.
In reaching this settlement, the FRB acknowledged the bank’s group-wide remediation initiatives and the full cooperation of BNPP in the investigation.
Six banks are facing a class action lawsuit over alleged abusive practices involving the use of last look in their e-FX businesses.
The six, BNP Paribas (which has already been fined by the New York Department of Financial Services for, amongst other things, it’s broad use of last look), Citi, Credit Suisse, Goldman Sachs, Morgan Stanley and Royal Bank of Scotland face a claim from former retail broker-dealer Alpari (US) in the hundreds of million of dollars according to documents filed in a New York court this week.
The top five FX dealers are losing market share, according to a new report from Greenwich Associates.
Although the world’s five biggest FX dealers still capture a massive 44% of global market share in aggregate, according to the research, that proportion is down from 48% last year and from 53% in 2013.
The report identifies several trends that are driving these changes. It says that while top-tier dealers have been narrowing the scope of their product, regional and client coverage, FX investors continue to increase their trading via multi-dealer platforms, which create a more level playing field for liquidity providers.
A UK appeals court judge has decided that former JP Morgan FX salesperson Patrice Ktorza’s case must be reheard by an employment tribunal.
In a judgement, Judge David Richardson accepted the bank’s claim that the original judge who head the case had adopted “a legally incorrect” approach to the law and “disregarded or misunderstood” important aspects of JP Morgan’s case.
Ktorza won his claim for unfair dismissal in August 2016, however Profit & Loss noted at the time that the case was “tricky” because it involved the subject of partial fills of client orders.
The average daily traded volume submitted to CLS was $1.55 trillion in May, up 2% from the previous month and up 10% year-on-year.
The CLS data shows FX spot ADV of $454 billion in May, up 4.4% compared to April and up 4.8% from May 2016.
Swap ADV, meanwhile, was $989 billion in May, which was flat on the previous month, but up 9% in comparison to the same month last year.
Although by far still the smallest product segment submitted to CLS in terms of ADV, FX forwards saw the biggest month-on-month and year-on-year increases in May.
HSBC is facing renewed legal action over alleged activities within its FX business.
According to a report in the Financial Times, which cites legal filings it has seen, global macro advisory firm ECU Group is requesting a court order the bank to hand over deal logs and other information relating to three separate stop loss orders the firm left with HSBC is 2006.
A source familiar with the matter tells Profit & Loss that ECU questioned the bank over market behaviour around the stops, but was told there was nothing untoward going on.
BNP Paribas has been fined $350 million as part of a consent order entered into with the New York State Department of Financial Services (DFS) for “significant, long-term violations of New York banking law” in the bank’s global foreign-exchange business.
DFS says its investigation found the improper conduct at BNP included collusive activity by traders to manipulate FX prices and benchmark rates; executing fake trades to influence the exchange rates of emerging market currencies; and improperly sharing confidential customer information with traders at other large banks.
Russell Lascala and Jon Tinker have been named as co-heads of FX at Deutsche Bank, reporting to Sam Wisnia, head of rates, who is now running an newly aligned rates and FX business.
The two men replace David Wayne, who has been appointed to a new role running electronic trading across asset classes at the bank as it brings together its electronic trading capabilities. Wayne will report to Garth Ritchie, co-head of Deutsche’s Corporate and Investment Bank as well as assume leadership of the bank’s strategic analytics teams across CIB
Following similar settlements from the big four Australian banks, Macquarie Bank has also accepted an enforceable undertaking (EU) from the Australian Securities Investment Commission (ASIC) in relation to the bank’s FX businesses.
Following an investigation, the regulator says it is concerned that the bank failed to ensure that its systems and controls were adequate to address risks relating to instances of inappropriate conduct identified by ASIC.
This settlement means that the top five Australian banks have all agreed to EUs from ASIC relating to their FX business.