Day: 9 October 2017

ISDA Weighs in on Brexit Impact

Brexit is unlikely to have any impact on the contractual certainty of derivatives trades, but could affect some trade lifecycle actions, according to International Derivatives and Securities Associations (ISDA) CEO, Scott O’Malia.

In an online post today O’Malia reveals that ISDA recently conducted analysis on one the ability of banks and investment firms to perform existing contractual obligations under transactions between the 27 European Union (EU) member states and UK counterparties that were entered into before Brexit. Specifically, this analysis focused on six jurisdictions – France, Germany, Italy, the Netherlands, Spain and the UK.

According to O’Malia, the analysis shows that it is unlikely that there will be an impact on the performance of contractual obligations on existing trades – which includes payments, settlements, transfer of collateral and the exercise of pre-agreed options.

INTL FCStone Subsidiary Offers Real-Time Indicative FX Rates

INTL FCStone’s Global Payments Division, a London-based subsidiary will now offer indicative foreign exchange rates, viewable in real-time for more than 140 currencies through its proprietary global payments network.

These indicative rates will be offered via the Global Payments Division’s Rate Feed product. The Rate Feed is designed to enable customers to instantaneously establish an accurate indication of the cost of a cross-border transaction, valuing the transaction or foreign currency holding in various currencies in real-time.

Although it remains a separate product, the Rate Feed is integrated into FXecute – INTL FCStone’s global payments platform – meaning that anyone using the latter can use information from the Rate Feed to inform transactions being executed on the platform.

Spot the Difference: Defining “Prime-of-Prime”

“Prime-of-Prime” has become something of an umbrella term these days, used by many firms operating very different business models. So Profit & Loss asked a number of firms that place themselves in this category exactly what constitutes a “true” prime-of-prime service provider.

And Finally…

With apologies to those loyal readers who normally part with their hard-earned cash to read this column, today I am going to make it “free to air” – mainly because I feel there is a message that simply has to get out there regarding FX execution and liquidity.
If nothing else, the ongoing Mark Johnson trial in New York is highlighting how there are some seriously poor assumptions made in the wider world about how the FX market really operates.

Regulators Must Keep Up with Fast Markets: BoE’s Salmon

In a speech on Friday, Chris Salmon, executive director, Markets, at the Bank of England, discussed the changing market microstructure, in particular the advent of “fast markets” and stressed it was “incumbent” upon authorities to keep up.
Salmon highlighted three recent flash events in financial markets, the equities market flash crash of 2010, the US Treasuries flash rally in 2014 and last year’s Cable flash crash and while he observed that sharp moves in asset prices are nothing new, “the speed, and the typical near-total reversal” is new.

Turkish Lira Slumps on US Visa Row

The Turkish lira dropped some 5% at the Asian open today after the US suspended all non-immigrant visa services in its Turkish consulates and Turkey responded as relations deteriorated.
Although Thomson Reuters has the official high at 3.7694, multiple sources report trading in USD/TRY above 3.80, with some reporting trades at 3.85 and 3.88. The market had opened at 3.6150.
Sources report the market functioned well with good liquidity and reasonable volumes and ticket sizes being executed – spreads were naturally wider.