Day: October 24, 2018

ASIC to Investigate Last Look

The Australian Securities and Investments Commission (ASIC) is to further investigate the use of last look in foreign exchange markets.
ASIC commissioner Cathy Armour told a conference this week that while the regulator accepts that last look may help facilitate a liquidity provider’s legitimate risk management, it also introduces the potential to exploit confidential client trading intentions and to otherwise treat clients unfairly.
The regulator says it will also conduct more sets of on site reviews of local banks’ foreign exchange businesses.

Research Paper Finds Fix Tracking Error Increased Post-Reform

A new research paper that looks at trading around the WM Reuters benchmark fix between 2012 and 2017 argues that while the mechanism has been made more robust and less open to manipulation, the shift to a five minute window has made actually achieving the benchmark harder for some market participants.
The paper uses what the authors term “a unique dataset that allows us to identify the actions of individual traders” that provide new insights into how trading decisions affect the properties of the fix benchmark, and how the presence of the fix affects trading patterns.

MarketFactory Integrates API with Elysium

MarketFactory has integrated its API, Whisperer, with Elysium Technology Group’s middle and back office product, Mission Control.

Whisperer is a low-latency API that connects traders to over 80 ECN, bank and non-bank FX venues for market data, trading and market making. Mission Control is a cloud-based enterprise solution that enables FX trading operations to automate and optimise middle and back office functions.

A global investment bank was the first customer to go live with the integration last month, says MarketFactory in a release issued today.

NYDFS Approves Coinbase as Qualified Custodian

Coinbase Custody has obtained a license under New York State Banking Law to operate as an independent Qualified Custodian.

It will operate as a Limited Purpose Trust Company chartered by the New York Department of Financial Services (NYDFS).

Coinbase Custody is designed as an institutional-grade service for storing large amounts of cryptocurrency in a secure manner. All assets trusted to Coinbase Custody are stored offline.

“For our customers, operating under a New York State Trust Company is more than just a new license  –  it’s an important piece of regulatory clarity that will allow us to compliantly store more assets and add new features like staking,” says Sam McIngvale, product lead at Coinbase, in an online post announcing the news.

Emerging Markets: Picking the Winners and Losers

Rather than moving in a synchronised manner, speakers at the Profit & Loss Forex Network Chicago conference predicted that emerging market (EM) performance has become divergent due to idiosyncratic factors within each country.

“In general, EM does well when you have at least two out of three things: one is global growth, two is a weak dollar, and three is lower US rates. So, if you look at this combination and where we are in the cycle, especially given all the easy money that we’ve had since 2008, I would be very careful with the emerging markets right now,” said Mo Grimeh, CIO at Mogador Capital Management at Profit & Loss Forex Network Chicago.