Month: October 2018

Non-Bank Firms Continue to Go Mainstream

FX market structure changes are behind a change in approach on the part of several non-bank market makers, and the direction of travel is very much the mainstream.

“The market structure has changed and our model has definitely changed with it,” said Laine Litman, head of Virtu Financial’s customised and disclosed liquidity offerings in FX and fixed income, in kicking off the second panel on liquidity provision at Profit & Loss Forex Network Chicago. “What liquidity consumers needed two or three years ago has changed and with that, we have had to look at our models as well as at how we interact with markets.

CME Clears Final Hurdle for NEX Acquisition

CME Group has received clearance from the UK Competition and Markets Authority for its acquisition of NEX Group.

This means that all of the conditions relating to regulatory and antitrust approvals for the deal have now been satisfied or waived.

The boards of NEX and CME announced on March 29, 2018, that they had reached an agreement on the terms of a recommended share and cash acquisition of the entire issued and to-be-issued share capital of NEX. On May 18, 2018, NEX shareholders approved the terms of the acquisition.

Agha Joins Stater as Strategic Advisor

Ashraf Agha has been appointed by Stater Global Markets as a strategic advisor, focusing specifically on operations and compliance.

Agha has almost 30 years’ experience in the financial sector, with roles including head of treasury at Saxo Bank, COO for the FX business at Marex Spectron, and co-founder and executive director of CFH Clearing, where he was accountable for all operations. He is also currently a board member of the regtech firm, muinmos.

Ramy Soliman, CEO at Stater, says: “Appointing Ashraf as a strategic advisor underpins our strategy of leveraging significant institutional experience to fast-track our growth.

Advanced Markets Launches in the UK

Advanced Markets, a provider of FX liquidity and prime-of-prime services, has launched in the UK as an FCA regulated company.

The new entity, Advanced Markets (UK), includes new trading servers in Equinix’s LD4 and LD5 data centres, as well as a new London office headed by Nina Baksh.

“The launch of our comprehensive London operation is an important step in the company’s global strategy,” says Anthony Brocco, founder and CEO. “It enables us to better serve our institutional broker and fund manager clients in the UK and Europe, by providing a regional matching engine, which is fully cross-connected with our bank and non-bank liquidity providers.”

The Best of Both: Combining OTC and FX Futures Markets

Paul Houston, executive director, global head of FX at CME Group, talks about practical applications of the exchange’s new FX Link product.

Explaining the genesis of the CME FX Link, which was launched earlier this year, Houston says that two years ago the exchange group was looking for ways to attract more people to its marketplace while also increasing the accessibility of its FX futures. A number of different ideas to achieve this were toyed with – such as creating new, shorter-dated contracts – but ultimately, staff at the CME concluded that it would be best to leverage the exchange’s existing liquidity pool.

NDFs – The New Model Market?

Volumes in NDF markets have increased dramatically in recent years, but what is behind this accelerated activity and will it continue? More importantly, what role are the lessons learned from the G10 markets playing? Colin Lambert finds out.

The biggest growth story in foreign exchange over the past two years since the Bank for International Settlements’ 2016 Triennial Survey of FX Turnover has largely taken place in the shadows, for while spot volumes have largely plateaued, activity in the non-deliverable forward segment has grown exponentially. NDF average daily volumes, as reported by the UK and US foreign exchange committees, is 50% in the two years from April 2016 – a pace of growth no other product can match.

Riksbank Moves e-Krona Project Ahead

The Riksbank has published a new report recommending that the central bank advances a project to develop its own central bank digital currency (CBDC).
The report proposes that the bank begins to design a technical solution for an e-krona in order to test which solutions are practicable and realisable; draws up proposals for legislative amendments needed to clarify the Riksbank’s mandate and an e-krona’s legal standing; and continues investigating the financial aspects of an e-krona.
Sweden’s central bank says that while it has provided the general public with money for 350 years, as the use of cash is continuing to decline in Sweden, “we need to think in new ways”.

And Finally…

I think it is important that the foreign exchange industry gets one message out at this time and gets it out loud and clear. The type of behaviour exhibited by the members of the Cartel around the start of this decade is not, and will not, be tolerated today or in the future.
To be fair, the members of the Cartel probably understand that today the FX industry is, in conduct terms, a very different place to what it was five years ago.

Re-Imagining the Prime Services Ecosystem

On a panel discussion entitled “The Twists and Turns of FXPB”, speakers at Profit & Loss Forex Network Chicago discussed the possibility for technology to radically re-shape the prime services ecosystem.

Technology’s impact on prime services was the jumping off point for the last panel at Profit & Loss Forex Network Chicago. Peter Plester, head of prime brokerage at Saxo Bank A/S highlighted the impact that technology had already in terms of risk management in this segment pointing out that the traditional plumbing for starting up a prime broker was to connect to NEX Traiana and the various ECNs and have STP for tickets, but that the central risk system internal to the PB was fairly manual.

Thai Corporate Adds Trading, Settlement Technology

Thai energy company, PTT Exploration and Production Public Company Limited (PTTEP), has implemented Refinitiv’s FXall trading platform and “Settlement Center” post-trade solution for managing its FX transactions.

Because PTTEP already uses Eikon, this maks it the first Thai corporate to adopt the end-to-end suite of services covering pre-trade, trade and post-trade phases, according to a statement. PTTEP executed its first production trades in early October.

Yongyos Krongphanich, executive vice president, finance and accounting group at PTTEP, comments: “This collaboration between PTTEP and Refinitiv is considered an important step for PTTEP in managing its foreign exchange risk management and streamline back-end processes. This will further improve company’s competitiveness and support sustainable growth in this challenging digital era.”