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.
The average daily volume (ADV) submitted to CLS in April was $1.52 trillion, down 5% from the ADV of $1.6 trillion that it reported in March.
The ADV of spot FX trades submitted to CLS was $435 billion in April 2017, down 5.8% month-on-month and down 8% year-on-year.
The ADV of swaps trades submitted to CLS was $988 billion in April, down 4.9% from the previous month, but up 1.2% compared to April 2016.
Similarly, the ADV of forwards trades submitted to CLS was down month-on-month, but up year-on-year. CLS reported an ADV of $93 billion for forwards products in April, down 2.1% from March, but up 24% compared to April 2016.
A new study from Greenwich Associates suggests that FX dealers are narrowing their focus in terms of which products and clients they will cover.
For the study, Greenwich says that it conducted interviews with 2,393 corporate and financial users of foreign exchange around the world about market trends and their relationships with their dealers.
The results showed that, for the second consecutive year, significant market share was redistributed among the dealers in the top ranks of the FX market in 2016, with some leading dealers adding as much as two full percentage points in market share and others ceding similar amounts.
Market sources tell Profit & Loss that Bank of New York Mellon has continued to add to its ranks as it builds out its FX business.
The sources says the bank has hired Richard Grover, Huazhang Luo and Patricia Muchinsky for its e-FX teams in London and New York. Grover and Luo will report to Jeff Leal, global head of e-FX, Muchinsky reports to Jason Vitale, COO, Markets at BNY Mellon.
Grover joins BNY Mellon from NAB in London, Luo from BNP Paribas and Muchinsky is joining the bank from V3 in Chicago.
Dan Torrey, global head of FX e-commerce sales, at Northern Trust, talks to Profit & Loss deputy editor Galen Stops about how the bank is planning and building a more comprehensive FX e-commerce strategy to meet the changing needs of its client base, noting it’s not just as simple as offering RFS in spot, forwards and NDFs in different regions across a broad array of pairs, but also being able to come up with customised solutions and putting more sophisticated execution tools in the hands of clients.
The Federal Reserve has announced two enforcement actions against Deutsche Bank that require the bank to pay a combined $156.6 million in civil monetary penalties.
The bank will pay a $136.9 million fine for “unsafe and unsound practices” in the FX markets, as well as a $19.7 million fine for failure to maintain an adequate Volcker rule compliance programme.
The Fed says it found deficiencies in the Deutsche’s oversight of, and internal controls over, FX traders and that the firm failed to detect and address that its traders used electronic chat rooms to communicate with competitors about their trading positions.
Societe Generale (SocGen) has launched a new Web app that uses FX options to monitor the pricing of risk events, such as elections, central bank meetings or economic releases.
The app, the SG FX Event Tracker (SG FX-ET), computes the overnight forward volatility that the FX options market expects for any trading day up to one year ahead, linked to the bank’s internal data and the weights that its market makers attach to risk events.
The charting module is designed so that users can dynamically compare the relative pricing of an event according to different currencies and can directly compare the pricing of different events.
ANZ and Westpac have both accepted enforceable undertakings (EU) from the Australian Securities and Investment Commission (ASIC) relating to control failures in their global FX businesses.
In December, the other two “majors” in Australia, CBA and NAB, each paid AUD 2.5 million after accepting similar charges.
Both ANZ and Westpac will both make a “community benefit payment” of AUD 3 million to support the financial capability of vulnerable people including women experiencing family violence, the elderly and youth at risk, ASIC says.