Day: 19 January 2017

Mizuho Bank Adopts Thomson Reuters Desktop

Mizuho has integrated Thomson Reuters FX desktop, FX Trading (FXT), into its trading workflows.
FXT brings together all of Thomson Reuters FX transaction venues onto one platform to create a single point of access to its pool of FX liquidity.
“In light of market volatility, decreased risk appetite and regulatory scrutiny, factors which impact FX market liquidity, FXT allows users to easily access maximum liquidity while complying with stringent regulatory standards,” says Michael Go, head of FX market development, Asia Pacific at Thomson Reuters.

Margin Deadline Could Lead to Swaps Market Disruption

The swaps market could suffer disruption if buy side trading firms aren’t ready for the March 1 deadline for the implementation of new margin requirement rules, speakers at SefCon VII warned.

Although buy side firms will not have to post initial margin for uncleared swaps transactions until 2019 or 2020, from March 1, 2017 they will be required to post variation margin when trading these products.

The main challenge highlighted by buy side speakers at the SefCon VII conference in New York on January 18 was the administrative burden of having the correct paperwork and documentation agreed with various counterparties.

Buy Side Calls for Swaps Trading Innovation

Representatives of buy side firms called for greater innovation and flexibility around swaps execution at the SefCon VII event in New York on January 18, hosted by the Wholesale Markets Brokers’ Association, Americas, and organised by Profit & Loss.

Speakers at the event explained that swaps trading has not changed much for the buy side since the introduction of Swap Execution Facilities (SEFs), with most buy side firms executing their swaps transactions via a request for quote (RFQ) format. The only difference now, they said, is that the RFQ occurs on an electronic platform rather than via the phone.

Giancarlo Pledges to Ease Margin Deadline

Christopher Giancarlo, soon to be acting chairman of the US Commodity Futures Trading Commission (CFTC), says that the commission will look at ways to ease the March 1 deadline for the new margin requirements for uncleared swaps.

These requirements will make posting variation margin compulsory for all non-cleared derivatives, and set strict requirements on the type of collateral that can be posted, the frequency of the margin calls, and the required timing for settlement.

When current chairman of the CFTC, Timothy Massad, steps down from his role on January 20, Giancarlo will become acting chair and, speaking at the SefCon VII event, which was organised by Profit & Loss, in New York yesterday, he was critical of the March 1 deadline for the new margin rules.

And Another Thing…

The feedback to Monday’s column was quick, comprehensive and did a very good job of raising my blood pressure. So strap yourselves in, this one comes from the sightscreen, is full of vitriol and, quite honestly, it’s very cathartic. Oh and by the way, if you’re in compliance or dealing desk oversight you might want to look away now – I don’t think you’re going to enjoy it.
I want to focus on one of the themes I raised on Monday – that of under-trained, inexperienced staff on FX trading desks.