Month: March 2018

CME and NEX: Building the Supermarket

If there’s one thing that has become abundantly clear over the past few years, it is that many OTC platforms have decided that they need to scale their businesses up and out in order to be successful in today’s FX market.

This was made abundantly clear in a press call today when Terry Duffy and Michael Spencer, respectively the CEOs of CME Group and NEX Group, talked about the logic behind their $5.4 billion tie-up.

“Effectively, what we’re building is a bigger supermarket,” said Spencer. “Why do people shop in supermarkets? Because it’s convenient to buy everything in one place.”

CME Group Set to Acquire NEX

CME Group is set to acquire NEX in a transaction valued at £10 per share, consisting of 500 pence in cash and 0.0444 CME Group shares.

The proposed transaction has been approved unanimously by the board of directors of both companies and is expected to close, pending approvals by regulators and NEX shareholders, in the second half of 2018.

“At a time when market participants are seeking ways to lower trading costs and manage risk more effectively, this acquisition will allow us to create significant value and efficiencies for our clients globally,” says CME Group chairman and CEO, Terry Duffy. “As one organisation, we will be able to employ the complementary strengths of each company to serve a wider client base while diversifying our combined businesses across futures, cash and OTC products and post-trade services.”

And Another Thing…

This won’t take long as it’s a long weekend for most in the markets, including me! Just to reminder subscribers that we will have the latest in our monthly Insight calls next Wednesday – I thought we’d give you an extra day to get things back in order – and there is plenty to talk about.
I’ve already had a couple of messages about the events of the past month, possible bids for NEX, unfair dismissal claims being won and the Cartel traders making their first appearance in court, so we can discuss all of that if we have time, plus there is something I want to get into regarding the FX market structure.
So, it will be great to have you join us – this is only open to subscribers – and I look forward to a nice long weekend preparing some ammunition for Wednesday!

Sada-Paz Exits BAML?

Market sources tell Profit & Loss that Mauricio Sada-Paz, EMEA head of e-FICC and global head of e-FX sales at Bank of America Merrill Lynch, has left the bank.
The sources say that he is joining Barclays in London as global head of e-FICC distribution.
Sada-Paz joined Bank of America in 2010 from Goldman Sachs, where he spent 10 years, in the FX business, culminating in him running the Iberian sales business.

Built to Become Big

Galen Stops takes a look at how and why Aston Capital Management is planning to scale up following its recent $100m investment. 

Aston Capital Management recently received an injection of $100 million in AUM and an additional $5 million in seed operating capital from private investors.  Following this investment, the firm’s CEO Isaac Lieberman is, perhaps unsurprisingly, bullish about its future.

“We have a goal through our strategic mandate and product development timeline to have capacity to be managing $2 billion in AUM within two years and I can actually see us achieving this goal quickly as this business accelerates,” he says.

To help achieve this goal, Lieberman has deliberately been structuring the firm so that it can easily scale up in the future. For starters, the firm has been getting a whole slew of regulatory and accountancy registrations in place.

CLS Posts Record Volumes in February

February was the largest month ever for trading activity processed by CLS with the service handling $1.949 trillion per day, up 8% month-on-month and up a fraction over 30% year-on-year. Just over $1.3 trillion was in FX swaps, $542 billion in spot and $100 billion in forwards. The greatest year-on-year growth came in FX swaps, up 33.6% from February 2017, followed by spot at +26.9% and forwards at +8.7%. The data reflects that from trading venues earlier this month, all of whom reported significant year-on-year gains.

Survey: NAFTA Cited as Main Driver of MXN this Year

The North American Free Trade Agreement (NAFTA) is the top macroeconomic issue that will affect the Mexican peso this year, according to the results of a Bloomberg foreign exchange survey announced today.

After polling more than 100 financial professionals in Mexico, Bloomberg found that 46% said that NAFTA is the macroeconomic factor that will have the biggest impact on the peso.

Meanwhile, 34% of attendees said that the peso would be most affected by the presidential election on July 1.

Redline Supports FX Forwards, NDFs on Cboe Platforms

Redline Trading Solutions has announced support for outright deliverable foreign exchange (FX) forwards traded on Cboe FX Markets and non-deliverable FX forwards (NDFs) executed on Cboe SEF.

This means that firms that are FX clients of Cboe using Redline’s InRush Market Data Ticker Plant and Order Execution Gateway can now receive market data and execute FX forwards on Cboe FX and NDFs on Cboe SEF via a single server.

“We are seeing significant interest in NDFs on Cboe SEF from our customers, and we are excited to be among the first providers to integrate with Cboe’s new venue,” said Mark Skalabrin, CEO of Redline.

Sarasini Promoted at smartTrade

Annalisa Sarasini has been promoted by smartTrade Technologies to the role of chief business development officer.

Prior to this, Sarasini had been working as global head of sales since joining the firm in 2012. In this role she was tasked with driving smartTrade’s sales growth worldwide while building a global sales team with a geographical presence in all main financial hubs.

In a release issued today, smartTrade says that Sarasini will continue contributing to the company’s sales growth and to strategic sales and marketing initiatives in her new role.

“Since joining smartTrade, Annalisa’s contributions have been invaluable, not only in driving the growth of the business, but also in helping build a great company culture,” says David Vincent, CEO of smartTrade Technologies.

FXPA Announces Board Members, Working Groups

The Foreign Exchange Professionals Association (FXPA) voted in a slate of new Board members at its annual meeting on March 6, and re-elected Chip Lowry, senior managing director at State Street Global Markets, as chairman, and Sean Tully, senior managing director at CME Group, as treasurer.

Members new to the Board include Lisa Shemie, chief legal officer, Cboe FX and Cboe SEF; Jill Sigelbaum, head of FXall, Thomson Reuters; and Christopher Matsko, head of FX trading services, Portware. Members re-elected to the Board include: Jason Vitale, COO FX & head of client execution, BNY Mellon Global Markets; Jonathon O’Donnell, investment manager, CalPERS; Tahreem Kampton, senior director, Microsoft; Tod Van Name, global head of FX electronic trading, Bloomberg; Stephen Komon, senior portfolio manager, Colorado PERA; KC Lam, head of FX and rates, Singapore Exchange (SGX); and Lowry of State Street.