Day: May 25, 2017

The FoXy’s: Profit & Loss Readers’ Choice Awards

Profit & Loss readers cast large numbers of votes this year for their preferred market makers and service providers.

Last year was the first that we changed the category description from banks to market makers to account for the larger proportion of non-banks that now comprise an important part of market making, and this is again reflected in the results.

The industry’s changing dynamics are starting to show. Voting, which spanned across time zones, was close in many categories, so we have listed the top three for each category to acknowledge the runners up.

The FoXy’s: Profit & Loss Readers’ Choice Awards

Profit & Loss readers cast large numbers of votes this year for their preferred market makers and service providers.

Last year was the first that we changed the category description from banks to market makers to account for the larger proportion of non-banks that now comprise an important part of market making, and this is again reflected in the results. The industry’s changing dynamics are starting to show.

Voting, which spanned across time zones, was close in many categories, so we have listed the top three for each category to acknowledge the runners up.

The Profit & Loss Hall of Fame 2017

Rita Saverino’s three decades in the FX industry began with an application for a secretarial job at Citibank in New York in 1982, but her native Italian landed her a job on the foreign exchange desk instead.

In an industry with few women traders, Rita worked her way up the ladder, becoming the chief FX trader at the biggest FX bank on the Street. The team at Citi was large and close knit – many of whom have spent their careers together.

In 1994, eight of the top traders from that Citi team – led by Michael deSa, then global head of FX at Citi – made one of the biggest en masse moves ever seen in the FX industry with an early morning move to Deutsche Bank, then a relative unknown. The number of dealers that ultimately made the move reached close to 20.

P&L Talk Series: Guy Debelle

Guy Debelle, deputy governor of the Reserve Bank of Australia and chair of the FX Working Group responsible for producing the Global Code, discusses his hopes and ambitions for the much-awaited document with Colin Lambert.

Colin Lambert: May 25 sees the full Code released after two years of work, what is your message to the wider market that is seeing it in its entirety for the first time?

Guy Debelle: I would like to stress that this has very much been a public/private endeavour to move the FX market to a better place by providing guidance around what constitutes good practice.

A Last Look at Last Look?

There is one area of the Global Code of Conduct that continues to attract controversy, and, Colin Lambert says,
we all know what it is…
Although the assessment is a little harsh given the type of misconduct that led to the creation of the FX Global Code of Conduct, it is hard not to understand where the head of e-FX trading at a major bank in London is coming from when they note, “The Code had one job – give us clarity on last look – and it has failed miserably.”

There remains the odd voice still raising concerns about Principle 11 and its apparent endorsement of pre-hedging, however, Guy Debelle, chair of the FX Working Group that created the Code, stresses this Principle is really about the “demonstration effect”.

The Blueprint for Adoption

Along with today’s launch of the full Code, the FX Working Group (FXWG) has also published its Blueprint for Achieving Adoption, in which it lays out four key tenets. These are that the Code should be clear, relevant and reflect good practice in the FX Market; it is the responsibility of market participants to take appropriate steps to adopt the Code in their day-to-day practices and culture; it is the role of central banks to lead by example and demonstrate their commitment to promoting and maintaining good market practice; and it is important that market participants and central banks maintain an active engagement with the Code and have appropriate structures in place to ensure that it remains relevant.

FX Global Code Formally Launched

The Bank for International Settlements’ (BIS) FX Working Group formally launched the full version of the FX Global Code of Conduct today in London, following the release of stage one in New York last year.
The Code contains 55 principles covering areas including ethics, transparency, governance and information-sharing. It also tackles complex topics such as electronic trading, algorithmic trading and prime brokerage.
“All of us recognise the need to restore the public’s faith in the foreign exchange market. We share the view that the Global Code plays an important role in assisting that process and also in helping improve market functioning,” says Reserve Bank of Australia deputy governor Guy Debelle, who chaired the FXWG.

New Global FX Committee Formed

In addition to the Code, central bank governors under the auspices of the Bank for International Settlements have formally announced the formation of a Global FX Committee (GFXC), with the Bank of England’s head of markets, Chris Salmon, at the helm.
One of the core objectives of the GFXC will be to promote and maintain the FX Global Code by ensuring that the guidance set out remains relevant and taking into account good practices for supporting adherence. It will seek to promote collaboration and communication among local foreign exchange committees and other jurisdictions with significant FX markets.

The FX Global Code of Conduct: What the Industry is Saying

Today marks the release of the FX Global Code of Conduct – a much anticipated event in the foreign exchange industry. Here is the reaction of senior figures within the industry. Chip Lowry, chair, FXPA: “The FXPA endorses the Global Code and its stated aim to promote a robust, fair, liquid, open and transparent market, which is very much in line with FXPA’s own principles. We recommend that our members demonstrate their commitment to adopting the good practices set forth in the Code. FXPA commends the global coordination and work of the BIS’s Foreign Exchange Working Group in strengthening global standards for those operating in the FX market. We fully support the adoption of its principles.”

And Another Thing…

If there is one subject upon which I have expounded a lot on recent months it is the FX Global Code of Conduct, so let’s keep this relatively brief.
Today has the potential to be a landmark day in the FX industry – a moment when it passes from being an unregulated market with what we now know were obvious cultural problems stemming from the technological revolution, to an unregulated market in which everyone knows the definition of bad practice in the context of a predominantly electronic market.