Month: April 2017

How Does FX Get Back to Growth?

After the Bank for International Settlements (BIS) Triennial FX Survey revealed last year that the industry has shrunk in terms of notional volumes for the first time in 15 years, speakers at Forex Network London outlined the factors that could help this market get back to growth.

During the discussion the speakers on the panel outlined a number of issues that have constrained trading volumes over the past three years, including technology shortcomings, a lack of investment in some areas of the market, and regulatory challenges.

Against this background, the question was put to the panellists, how does the FX industry get back to the kind sustainable growth that it witnessed between 2001 and 2016?

CME to Add New Triangulation Products

CME Group will expand the number of FX products it offers triangulation functionality in on May 14
Contracts in premium quoted (PQO) and volatility quoted options (VQO) on yen, sterling and Swiss franc futures will be available on that day (for trade date May 15) and the exchange is planning to go live with euro and Canadian dollar options on June 18 for June 19 trade date.
Triangulation links the books via implied calculations, combining premium quoted orders with futures orders to create and post implied volatility into the volatility quoted book.

Credit Not Only Factor Changing Prime Services

As access to credit has becoming increasingly constrained in the FX market, Noel Singh head of e-FX business development at Sucden Financial, explains that this is only factor at play in the evolving prime services space.

Questioned on the new credit reality in FX markets, Singh responded: “I think credit is only one aspect of the story and I think that post-SNB, when the top tier prime brokers lost money because their clients couldn’t make good the losses, that started it, but I think it’s now the concept of how much is the wallet worth to the prime broker.”

Bank of England Releases Money Market Code of Conduct

The financial markets industry has another code of conduct to confirm with after the Bank of England released its new, voluntary, UK Money Markets Code, which sets out the standards and best practice expected from participants in the deposit, repo and securities lending markets.
The Code is underpinned by the key principle that participants should always act in a manner to promote the integrity and effective functioning of these markets. It also outlines six high-level principles encompassing: ethics, governance, risk management, confidentiality, execution and settlement.

And Another Thing…

The major liquidity providers in FX are looking at their client tail – and the sharper, or smarter, traders are being cut. Part of me thinks these traders should take their chances with the other professionals, but I am worried that some – as evidenced by a recent conversation – have this view about asset managers and corporates. Of course tensions exist in relationships between provider and consumer but the solution should be simple and not to the detriment of the wider world.

Would the Global Code Have Prevented FX Scandals?

One of the key questions surrounding FX Global Code of Conduct, of which the second part is due to be released on May 25, is whether it would have actually prevented the scandals that have dogged the FX industry in recent years.

Brigid Taylor, global managing director of ACI, argues that it would have.

“In financial markets people say: talk is cheap but my word is my bond. So if I say that I’m going to do something then I need to understand what that means, I need to understand how to apply that knowledge and then I need to do it,” says Taylor, adding that this knowledge ensures accountability.

Fenics Adds Two to its Americas Team

Fenics Market Data, which is owned by brokerage firm BGC, has added two new members to its Americas team, both based in New York.

Damien Fitzpatrick joins BGC as head of sales, Fenics Market Data, for the Americas, reporting to Elliott Hann, Fenics Market Data’s director of sales.

Fitzpatrick joins from Icap, a subsidiary of TP Icap, where he was most recently head of sales and business development for Asia Pacific. Prior to that, he worked at Thomson Reuters in various commercial roles in New York, London and Singapore.

Hotspot Names New Head of FX Liquidity Analysis

Hotspot has appointed Jon Weinberg as head of FX liquidity analysis. Weinberg will move into this newly created role from UBS, where he was head of liquidity management within the bank’s FX e-trading group.

At Hotspot, he will be responsible for creating data analytics aimed at enhancing the trading experience of Hotspot’s customers. Based in London, Weinberg will report directly to Bryan Harkins, head of US equities and global FX at CBOE, which recently acquired Hotspot’s parent group, Bats Global Markets.

De-Mystifying Blockchain

Speakers at Profit & Loss’ Forex Network London tried to “de-mystify” blockchain technology as they talked about its practical applications within the financial services industry.

Andy Coyne, CEO of Cobalt DL, explained that when he first began looking at how blockchain technology could be applied to post-trade FX he found that there was a lot of noise and hype around the technology, but that there was a dearth of companies actually ready to implement it in a practical manner.

Coyne said that he looked at the issue that his firm was trying to solve, which was how to reduce cost and risk in post-trade processes, and then started examining if and how this technology could help.

London Retains Number One RMB Spot

London remains the dominant offshore centre for RMB FX trading and payments according to the latest RMB Tracker from Swift.
The Swift report focuses on the City of London as an offshore RMB hub and includes statistics and analysis for the first three months of the year as well as insights about the RMB and the state of play in London’s FX market.
As of March 2017, Swift’s data shows that 36.3% of the RMB FX transactions (excluding China) are conducted with the UK.