Day: 20 October 2016

New Study Highlights Hedge Fund Tech Spending

Hedge fund managers are increasing their investment in technology to create competitive advantages and address regulatory and operational concerns, according to a new study by KPMG International, the Alternative Investment Management Association (AIMA) and the Managed Funds Association (MFA).

The study polled more than 100 global hedge fund managers representing approximately $300 billion in assets under management (AUM) and found that 90% of these firms are investing in technology to improve controls and compliance. A similar amount, 88% of respondents, said that efficiency objectives were their top reason for investing in technology.

Underwood FX Expands Offering

Underwood FX has announced two new partnerships and a new hire in a bid to expand the expertise that the consulting firm can offer.

Barclay Leib of Sand Spring Advisors has partnered with Underwood FX to provide alternative asset consulting and securities law violation investigative intelligence.

Additionally, Jennifer Ropiak of Trusted Partner Metals has begun working collaboratively with the firm by providing experience in precious metals market structure, trading, and product development.

Underwood FX has also hired Andrew Beresin, a practicing NY State attorney that specialises in legal matters including regulatory inquiries, investigations, and enforcement defense.

UK SMEs Unprepared for Impact of Brexit on FX Costs

UK small- and medium-sized businesses (SMEs) remain exposed and unprepared for the economic impact of the Brexit vote on their FX costs, according to a survey by EarthportFX, a cross border payment network.

Despite the fact that 77% of survey respondents acknowledged the need to change their approach towards foreign exchange hedging in the face of highly volatile currency markets and the depreciation of the pound following the UK’s decision in June to leave the EU, 80% admit they have made no changes to their hedging strategies.

Pragma Completes Migration to NY5

Pragma has completed the upgrade and migration of its New York trading and connectivity infrastructure to Equinix’s NY5 data centre.

The data centre move concludes what Pragma says has been a multi-million-dollar upgrade of its technology infrastructure. Over the last year, it has migrated to a new server and network equipment in a bid to provide its algorithmic trading clients with greater performance, capacity and operational resiliency.

David Mechner, CEO, comments: “Pragma provides enterprise outsourced algorithmic trading solutions to banks, brokers and asset managers. Trading institutions operate in a cost-conscious environment, yet competitive forces require them to continually invest in hardware, as well as software and algorithms.

Have Buy Side Firms Been Asleep at the Wheel?

In recent years the sell side has justifiably been criticised for its behaviour in the FX market. But should regulators and market participants be taking a closer look at how the buy side operates in this market? Galen Stops reports.

The FX industry has been rocked by a number of scandals in recent years and in many cases the implications of these scandals is only now coming home to roost.

Two of the largest custodian banks in the world, BNY Mellon and State Street, have agreed $714 million and $530 million settlements, respectively, related to allegations they systematically set disadvantageous rates for their customers in contrast to their claims to be achieving best execution for them.

And Another Thing…

Apparently people are struggling to make money in foreign exchange markets this year – as I heard for the thousandth time earlier this week! Mean reversion is playing a role, without doubt, but there is something, more basic, at the heart of participants’ struggles and one person’s experience from Brexit night is illustrative. How can it be that people have missed out on making money on a well-signalled, prolonged move in FX markets? Here is one possible answer – and it goes back to the roots of trading methodology

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