Day: 31 March 2019

In the FICC of it

Following on from Profit & Loss’ recent Forex Network New York event, Galen Stops gives picks out a few key themes from each panel session for discussion with Colin Lambert.On the trading side, they talk about whether there is such thing as “the wrong kind of volatility”, Stops says that panellist responses to a Brexit question perfectly sums up the confusion around recent political events in the UK and they question whether the industry has become so good at trading FX that it’s effectively killed market.Looking at trends around credit intermedation, Stops reveals that there is an emerging debate about whether more buy side firms will gravitate towards the FXPB or centrally cleared model and the pair discuss why it might be inevitable that market participants will pay more for PB services in the future.

FCA Officially Bans Retail-Orientated Binary Options

Following consultation feedback, the UK’s Financial Conduct Authority (FCA) has confirmed all firms acting in or from the UK are prohibited from selling, marketing or distributing binary options to retail consumers.
The FCA aired its concern about the products in late 2017, before issuing a consultation paper in late 2018 seeking industry feedback, It now says that following that feedback it will officially introduce new rules on April 2, 2019, “to tackle widespread concerns about the inherent risks of these products, and the poor conduct of the firms selling them”. It adds, “This has led to consumer harm in the UK and internationally through large and unexpected trading losses.”

Second Barclays Trader Convicted of Euribor Manipulation

Just days after former colleagues Carlo Palombo was convicted of similar charges, a UK jury has found a second former Barclays interest rate trader guilty of Euribor manipulation.
Former managing director at Barclays, Colin Bermingham, has been convicted of manipulating the benchmark rate at the height of the financial crisis following an investigation and prosecution brought by the UK’s Serious Fraud Office (SFO).
A third trader, manager of the liquidity management portfolio at Barclays, Sisse Bohart, was acquitted last week.

Brachet Leaves Citi?

Profit & Loss understands that Alexis Brachet has left Citi in New York where he was a managing director and head of emerging markets FX trading for Latin America.
Brachet joined Citi subsidiary Banamex in 2008 in Mexico City before moving to New York in 2015, prior to Banamex he worked for BNP Paribas for six years and Donaldson, Lufkin and Jenrette Securities for three years in trading role.
His destination is unknown and Citi did not comment by press time.

And Finally…

One aspect of the feedback to my midweek column caught my imagination and, possibly thanks to sleep deprivation, made me fear that I have seen the seeds of the next FX scandal being sown. I think the banking industry has a problem with how it judges the performance of voice traders – what worked two decades ago simply doesn’t now, and we need it to change before we breed a similar level of desperation to hit targets to those that incubated the chat room scandal.

BIS Launches 2019 Triennial Survey

The Bank for International Settlements (BIS) formally launched the 12th Triennial Central Bank Survey of Foreign Exchange and Over-The-Counter (OTC) Derivatives Markets – the survey that is universally used as the benchmark measure of the size of the daily FX market.
Conducted every three years since 1986, the Triennial Survey is the most comprehensive source of information on the size and structure of global foreign exchange and OTC derivatives markets. It aims to help central banks, other authorities and market participants monitor developments in OTC markets and inform discussions about reforms to OTC markets.