Day: April 5, 2018

CME, Bucks the Trend as NEX and Thomson Reuters Report March ADV Drop

CME Group has bucked the trend amongst FX platforms reporting a month-on-month decline in activity with a 3% increase in FX ADV. Elsewhere, NEX Group, which is subject to a bid from CME, reports NEX Markets handled $92.7 billion in March, a 14.4% drop month-on-month, but a 7.2% rise from `March 2017. It was a slightly more positive picture at Thomson Reuters, which reports spot ADV of $105 billion, down 7% from February but up 11% year-on-year – the firm also says non-spot activity increased 1.7% from February.

BoE Names Churm as Head of FX Division

Rohan Churm has been appointed as head of the FX division at Bank of England (BoE), succeeding Rebecca Jackson.

A spokesperson for the BoE declines to comment on the news, but Profit & Loss understands that Churm took on this new role late last year.

Prior to this, Churm was the head of the Stress Testing Strategy Division at the BoE.  The division was created in 2014 and is responsible for the delivery of stress tests and development of the stress testing framework.

The October 2015 paper, “The Bank of England’s Approach to Stress Testing the UK Banking System”, set out the main features of the Bank’s stress-testing framework to 2018.

CLS and NEX Expand FX Compression Service

CLS and NEX Group have announced that they are extending the triReduce CLS FX service to third parties. These institutions will participate in the same compression cycles as CLS settlement members.
Financial institutions and multinational corporations that settle in CLS Settlement through a settlement member are now able to join the compression service, benefiting from reduced counterparty exposures.
NEX’s triReduce and CLS pioneered the triReduce CLS FX service to provide risk mitigation services for the global FX market for non-cleared OTC derivative trades. The service combines CLS’s infrastructure and market connectivity with triReduce’s compression expertise.

And Another Thing…

Does the FX industry want to continue along the road to modernisation, or has it gone far enough? Answering this question is the starting point for the issue I want to discuss, because there is a push out there for same-day and then instantaneous settlement of “spot” FX transactions, but at the moment who would want to be involved in that? All it would take is one slightly contentious move and one large barrier or stop executed and we would be in a pile of trouble.

Five Big Questions Following the CME/NEX Deal Announcement

Following the announcement that CME Group is to buy OTC platform operator and post trade services provider NEX Group for $5.4 billion, Galen Stops, raises five important questions that both the parties involved in the deal, and the wider FX market, probably need to consider. Is it good value? Could there be more deals for OTC platforms? Do OTC platforms need scale to survive? Will this deal lead to more futures trading? And does this deal represent competition for LCH?

Cboe Forms Markets Division: Names Heads

Cboe has formed a Markets division to unify product, sales, business development and account coverage personnel across the company’s US equities and options, ETP listings, global derivatives and FX businesses.
The new division will be supported by multi-asset resource teams and headed by Andy Lowenthal and Bryan Harkins, who have been appointed executive vice presidents and co-heads. Lowenthal has been leading Cboe’s global derivatives group, while Harkins led Cboe’s US equities business, comprising four distinct stock exchanges, as well as the firm’s global FX business