Day: 13 July 2018

FXC Critical of Shifting Compliance Burden to FX Dealers

The Federal Reserve Bank of New York’s Foreign Exchange Committee (FXC) has issued a letter criticising market participants for trying to shift the burden of enforcing internal policies and controls towards FX dealers.

In the letter, the FXC says that its member firms have noted that FX market participants occasionally send notices, letters and other communications (“authorisation letters”) to dealing firms “that limit and/or restrict the authority of individuals to submit orders or instructions, trade, invest or authorise settlement-related instructions on the firm’s behalf”.

Treasury Association Launches FX Global Code Register

The European Association of Corporate Treasurers (EACT) has today launched a register for corporates adhering to the FX Global Code (Code).

Since its drafting phases, the EACT has supported the Code, which was published in May 2017, and is a set of principles that aims to promote a robust, fair, liquid, open, and appropriately transparent market for all market participants.

The EACT’s register is intended for corporate treasury departments that are participating in FX markets as end-users. The EACT register is included in the Global Index of Public Registers.

Cryptos Poised to Go Mainstream

Traditional financial services firms, such as banks, are clearly poised to enter the crypto space, explained speakers at the Profit & Loss Forex Network New York conference.

“Banks are going to make so much damn money off of cryptocurrencies,” said Nikhil Kalghatgi, a partner at CoVenture, a firm that has a multi-strategy asset management platform for cryptoassets. “They’re chomping at the bit, laying the pipe right now in order to get connectivity, to answer all the regulator’s questions.”

When thinking about the evolution of technology underpinning cryptocurrencies the key question, according Kalghatgi, is whether it has the potential to be an Internet-sized phenomenon. He pointed out that there was a clear gap between when people first heard about about the Internet and then started using it, and that cryptocurrencies could follow a similar adoption trajectory.

ISDA Launches Global Consultation on Benchmark Fallbacks

The International Swaps and Derivatives Association has launched a market-wide consultation on technical issues related to new benchmark fallbacks for derivatives contracts that reference certain interbank offered rates.
The consultation sets out options for adjustments that would apply to the fallback rate in the event an IBOR is permanently discontinued.
ISDA has been leading an industry effort to implement robust fallbacks for derivatives contracts referenced to certain Ibors since 2016, at the request of the Financial Stability Board’s Official Sector Steering Group.

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