Day: 17 July 2017

BNP Paribas Agrees $246m FX Settlement

BNP Paribas (BNPP) has agreed a $246 million settlement with the Board of Governors of the Federal Reserve System (FRB) relating to past misconduct in its foreign exchange business.

The settlement will be covered by existing provisions. This follows the announcement by BNPP of a settlement with the New York State Department of Financial Services on the 24th May relating to the same issue.

In reaching this settlement, the FRB acknowledged the bank’s group-wide remediation initiatives and the full cooperation of BNPP in the investigation.

Citadel Securities Partners with BestX

Citadel Securities has partnered with BestX to provide its clients with independent analysis of its FX execution quality.

“We’re confident in the quality of our execution and partnering with an independent TCA provider demonstrates this. From a market structure standpoint, I think that the FX market can benefit from more transparency, whether it’s through independent measurement of execution quality or the creation of a central tape,” Kevin Kimmel, global head of e-FX at Citadel Securities, tells Profit & Loss.

Kimmel says that providing independent TCA provides value because it eliminates any potential concerns of bias in the execution analysis and because it helps create standardisation in terms of how the analysis is conducted.

What Do Clients Want From Their Liquidity Providers?

Shortly after Citadel Securities won the Best Market Maker in Major Currencies category at Profit & Loss’ The FoXys Reader’s Choice Awards, Kevin Kimmel, global head of e-FX at Citadel Securities, sat down to discuss what firms want from a modern liquidity provider.

“I think it’s important for market makers to customise their liquidity to each individual consumer,” says Kimmel.

Although he acknowledges that “market impact” has become something of an industry buzzword recently, Kimmel maintains that there truly is a large segment of the liquidity consumer universe that is looking to trade with firms that are willing to warehouse risk because it will help minimise their market impact. There is also though, he says, clients that are much more aggressive in accessing the market that just want tight prices and a high fill rate.

And Finally…

I am very grateful for the responses to Thursday’s column, ranging from congratulations, through jokes, to guesses as to exactly what event triggered the Cable drop I was talking of. On the latter the favourite was the infamous (and possibly apocryphal) story of the “Carrier Down” message, but I think it was later than that.
Either way, to complete my self –indulgent look at my top 10 events from my 40 years in foreign exchange, here are the top five.