Month: October 2017

CME to Launch Bitcoin Futures

CME Group plans to launch bitcoin futures in the fourth quarter of 2017, pending all relevant regulatory review periods.

The new contract will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR), which serves as a once-a-day reference rate of the US dollar price of bitcoin. 

Bitcoin futures will be listed on and subject to the rules of CME.

“Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract,” says Terry Duffy, CME group chairman and CEO.  “As the world’s largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities.”

Broadway Announces Fixed Income Expansion

Broadway Technology has signed three tier-one banks, including Barclays, to mark its expansion into the global fixed income marketplace.

Broadway’s fixed income and foreign exchange clients now include 20 of the world’s largest banks and financial institutions, the company says. Its patented enterprise middleware, the TOC, serves as the core underlying platform, allowing customers to build their own integrated applications that interoperate with Broadway’s fintech solutions.

 The firm says its aims to deliver comprehensive, out-of-the-box fintech solutions while, also giving clients an ability to rapidly adapt and customise over time.

R3 Reveals New Payments Solution

R3 and 22 of its member banks have developed a new international payments solution that leverages distributed ledger technology (DLT). 

A protoype of the solution – which is being built on R3’s Corda platform – is due to be released by the end of 2017.

In a release issued today, R3 notes that domestic payment systems have advanced in many countries to the point of providing real-time funds transfer for customers, highlighting by contrast the extremely inefficient, expensive and slow experience businesses encounter with international payments. 

Bridging the Gap

Galen Stops takes a look at the new initiative from the CME that aims to bridge the gap between the OTC and listed FX markets.

It’s an old debate in the FX industry – will the market inevitably move towards an exchange model? Indeed, this question was the cover story on a 2001 edition of Profit & Loss. 

As part of the response to the financial crisis, regulators favoured pushing more trading activity towards a centrally cleared model, while certain other regulations looked to add extra costs into bilateral trading. All of this led some market observers to predict that more trading activity would shift towards an exchange traded model. 

MAS Targets FX as Part of Growth Plan

The Monetary Authority of Singapore (MAS) says it will encourage key FX players to site their pricing and matching engines in the city state as it strives to become “a leading financial centre in Asia”.
In a speech delivered launching Singapore’s industry transformation map (ITM), Ong Ye Kung, Minister for Education (Higher Education and Skills) and MAS Board member, described MAS’ vision for Singapore being one that connects global markets, supports Asia’s development, and serves Singapore’s economy. The ITM was drawn up by MAS in consultation with the financial industry and the tripartite movement, MAS says.

Digitec Reorganises

German-based technology provider Digitec has reorganised its senior management. Andreas Kiesselbach, who has been with the company for more than 25 years and has focused on providing banks around the globe with Digitec’s D3 pricing platform, has been named a director of the firm.
Additionally, Peer Joost has been promoted to head of marketing and sales, and will continue to report to Kiesselbach.
Joost has been joined in the sales team by Sibylle Helms, who moves to the firm having held online marketing specialist roles at Microsoft and Yahoo.

Behnam to Sponsor Market Risk Committee

Rostin Behnam, a commissioner at the US Commodity Futures Trading Commission (CFTC), will sponsor the agency’s Market Risk Advisory Committee (MRAC). 

The CFTC also announced temporary sponsors for the Agriculture Advisory Committee and the Global Markets Advisory Committee, until additional commissioners are confirmed by the US Senate.

Behnam will lead the MRAC, which advises the commission on matters related to evolving market structures and movement of risk across clearinghouses, exchanges, intermediaries, market makers and end-users.

“I look forward to continuing the important work of my predecessor for this committee, which studies an area that’s critical to the Commission’s mission,” says Behnam.

New Change FX Adds Forwards, NDFs, to Service

New Change FX (NCFX) has extended its independent data service to include forward points across standard tenors, non-deliverable forwards and restricted currencies.
Alongside the existing NCFX Spot service, the firm says the roll out ensures it is able to provide independent FX data for analysis of any FX deal. Ahead of the implementation of the PRIIPs rules on 1 January 2018 it is obligatory for FX market users to obtain a consolidated feed of data that cannot be derived from a single dealer or platform.

Capitolis: The Airbnb of Credit?

Galen Stops speaks to market sources about the feasibility of splitting prime services into credit provision and trade processing.

Capitolis is the latest venture headed by Gil Mandelzis, the former EBS BrokerTec and Traiana CEO. Mandelzis co-founded the company along with his former Icap and Traiana colleague, Igor Teleshevsky, and former Thomson Reuters CEO, Tom Glocer in New York earlier this year. Mandelzis operates as CEO of the firm, Teleshevsky is VP of R&D and Glocer is listed as an executive chairman.

And Finally…

While I read Friday’s Bank of England Staff Working Paper on the sterling flash crash with interest, I still find myself wondering why we continue to ignore the events of the minute before the crash? Someone was a motivated seller, wouldn’t it be nice to know why that was the case? The paper also highlights one of the more troublesome issues in FX today – liquidity recycling – and that is something that needs a lot more analysis than currently available.