Day: 23 July 2018

XTX’s 2017 Profits Remained Flat Amid Low Volatility

XTX Markets’ annual report and financial statements for the year ended 31 December, 2017, show that its year-on-year profit remained largely flat at £60.98 million. In 2016 it reported a profit of £60.46 million.

In the financial documents, Alex Gerko, founder and CEO of XTX Markets, said that the profits generated last year met expectations, given the lack of volatility in the markets. He added that, rather than just profit, the key performance indicators for the company are the net trading revenues and the profit before tax.

“Revenues have grown 17%, driven by the company’s expansion into new markets and products and optimisation of existing strategies. The company’s trading strategies seek to take advantage of pricing movements in global securities that would be accentuated in periods of higher volatility in the underlying markets and securities in which the company opts to trade.

Moumdjian Tapped to FX Head Sales at BNY Mellon

Harry Moumdjian has been appointed as global head of FX Sales at BNY Mellon Markets.

In this newly created role, Moumdjian will be tasked with unifying BNY Mellon Markets’ FX sales teams globally and reviewing the bank’s currency product suite as it continues to try and build out a full-service FX platform.

Moumdjian joins from Morgan Stanley, where he has spent the past eight years, most recently overseeing the firm’s DeltaFX and e-FX sales functions. Prior to this, he worked at Goldman Sachs, Bank of America and Citibank in a variety of FX sales and trading roles.

Boillereau Exits HSBC

Frederic Boillereau has left his position as head of global FX and commodities and head of global markets corporate services, at HSBC.

Based in London, Boillereau leaves after 20 years at the bank.

“I would like to take this opportunity to thank Frederic for his significant contribution since joining HSBC 20 years ago. His efforts have ensured the FX and global markets corporate services businesses are better placed to serve our client base with the products and services they need. I wish him well for the future,” says Thibaut de Roux, head of global markets at HSBC, in an internal memo seen by Profit & Loss.

In the memo, which was distributed internally at the bank on Friday, Rahul Badwar was named as the new head of global markets corporate services.

Survey: Financial Firms Look Towards Public Cloud

In a new survey conducted by Thomson Reuters, 90% of financial services firms said that they will use public cloud for the majority of their market data needs in less than four years, while 24% said that they will do so within just one year.

Meanwhile, respondents said their firms would be increasing investment in public cloud by over a half, from 30% of IT budgets in 2017 to 47% in 2019.

These results are particularly significant, given that financial services firms are increasingly fuelled by data, whether to discover profitable new insights or to help them automate their reporting processes and manage costs at a time of intense regulatory pressure.

Firms Likely to Dominate Markets Using AI

The increasing use of AI technology is likely to create incumbent firms that dominate markets, said panellists at the Profit & Loss Forex Network New York conference. However, they also said it might not be the biggest firms in the markets today that become these incumbents.

“I think [AI] is changing the landscape quite a bit,” said Andrej Rusakov, a partner at Data Capital Management, a hedge fund that uses AI tools to develop trading strategies. “People who are missing the wave are going to be left behind, I don’t think there’s any question about it. I think that human day traders will be wiped out, if they’re not already.”

And Finally…

People are fond of “looking at the bigger picture” but when it comes to the legal profession and FICC markets, frankly the bigger picture confuses me. How else can we explain how a number of traders are facing jail time and yet so many other traders are winning their unfair dismissal cases? To me, the issue clearly highlights the level of collateral damage in the industry and requires the banks (and regulators to a degree) to have a serious reappraisal of their approach.

Pla Leaves UBS

Profit & Loss understands that Ed Pla, managing director and global co-head of ICS execution and clearing at UBS, has left the bank.
Pla, who was named to his role in 2013 after heading UBS’ prime services business for seven years, started with the bank in 1994. He was also chair of FIA, and has stepped down from that role to be replaced in the interim by Jerome Kemp, managing director and global head of futures, clearing and collateral at Citi.

360T Reports Uptick in FX Volumes

Deutsche Borse says that FX volumes handled by its 360T unit averaged $67.8 billion per day in June, up 3.1% from May and up 5.4% year-on-year.
The data includes all FX trades and as such are not comparable to other venues’ results, however a month-on-month gain was only achieved in June by FXSpotStream and Thomson Reuters. At $67.8 billion, 360T’s ADV in June represents the second highest monthly turnover for the firm according to data that starts in January 2015.

In the FICC of It

In this week’s In the FICC of It podcast, Galen Stops breaks ranks to say he found one of Colin Lambert’s columns interesting, while the latter makes an appeal for expert knowledge on risk-free rates – if only so he doesn’t have to blag another podcast feature.
They also discuss the latest unfair dismissal outcome in the UK in which yet another FX dealer was found to have been wrongly sacked, as well as the potential implications for the fintech industry from a legal case in the US. In a busy podcast they also dispel some myths about AI – while at the same time making a big statement (is there any other kind?) on what will make AI trading successful; and they pick out their early selections for must-not-miss sessions from Forex Network Chicago in September.

Banerjee Ruling Leaves RBC Looking at a Big Bill?

The judge’s summary in the unfair dismissal case in which John Banerjee won his claim against Royal Bank of Canada has been published by a London employment tribunal and could see the bank facing a large compensation bill.
Rarely in such cases, Banerjee’s claim for whistleblower status was not dismissed, with Employment Judge James Tayler finding that he was unfairly dismissed principally for “the making of a protected disclosure”.
In the ruling, Judge Tayler refers to an address, in which staff were encouraged to report wrongdoing, and were told “don’t ask don’t tell will not be tolerated”.