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A Closer Look At: Bespoke FXPB Systems Marcus Butt, global head of FX prime services and futures at NatWest Markets, talks about how the bank is developing its FX Prime Brokerage offering in response to changing client needs. Profit & Loss: So what are you doing on the FXPB side of your e-FX platform that you think differentiates your offering right now? Marcus Butt: What we're doing on the platform that is unique is really a reflection of what we’re doing in the business. Part of this is that we’ve introduced a number of new prime brokerage models to accommodate the diversification of our client base.
A Closer Look At: A New Approach to Commodities Ronan Julien, global head of commodity derivatives e-distribution at BNP Paribas, talks about how the bank is doing things differently in the commodities space. Profit & Loss: What do you think is differen about your approach to listing commodities on your e-trading platform? Ronan Julien: The way that commodities trade is largely the same as it was 10 years ago. However, the demands from clients on the one side and regulators on the other have continued to evolve and so we looked to other asset classes for inspiration to help solve this disconnect.
US Court Sentences FX Trader to Two Years Mark Johnson, the former head of global FX cash trading at HSBC in London, has been sentenced to two years in prison following his conviction for eight counts of wire fraud and one conspiracy charge by a US court in October last year. Johnson was also fined $300,000. Profit & Loss has reported extensively on the case, and just pulling out a few of the headlines provides a fairly decent timeline for how the case has developed since Johnson was arrested in New York almost two years ago.
Best Structured Products Platform P&L Report Card Structured products have become mainstream with the explosion in service providers offering second generation derivatives and other yield enhancing products. Most banks now offer a reasonable range of structured products and more and more are building out the ability to create your own basket. Mainly it has to be said, we are seeing this in the FX space – we are primarily a currency and derivatives magazine after all – but there are also some looking more closely at multi-asset structured notes.
Best FX Prime Brokerage P&L Report Card There are signs – and we should be whispering it – that the prime brokerage space is waking up again. Partly we suspect this could be because some prime-of-primes are revitalising the major providers (it could also be they are getting too good for the majors’ liking and the latter needs to spend more on keeping clients) and partly it is because they are done cutting the client tail and are now content to focus on better functionality for those remaining clients.
Best Research Platform P&L Report Card If there appears to be one area where MiFID II has been something of a fizzer it is research – or at least in FX terms it is. Few, if any, banks were concerned or had seen a huge impact on their output, generally speaking if required a client could be put behind a virtual paywall, or not permissioned for certain content. Others are happy to absorb the cost of research, meaning that for many clients not a lot has changed and for the banks, few have dramatically changed their business model.
Best Order Management P&L Report Card Although the algo is taking on more importance in terms of order management, the relatively slow take up, allied to more short term bursts of volatility, means that customers are refocusing their attention on basic order management. The trust issues that drove a wedge between some clients and the banking industry appear to be on the way to being, if not totally, solved, not least thanks to sometimes draconian oversight at the banks. Thus an old friend, the order, is making a comeback. Of course, if we were to be cynical we would say it is doing so because leaving an “at best” order neatly shifts the best execution emphasis back onto the bank!
Algo Provider of the Year P&L Report Card T his has become a very competitive field over the past couple of years and is showing little or no sign of slowing down, for just about every major FX bank has a suite of algo execution tools available for clients. Achieving higher adoption rates remains something of a problem, however it is noticeable that the advent of third party mechanisms to analyse execution quality does appear to be giving clients some confidence in using algos – this is important if the impressive budget outlay is to be rewarded.
2018 Post-Trade Award P&L Report Card Well we’ve mentioned MiFID II enough in this feature so it’s time to focus on the area that bore a lot of the reporting brunt, for post-trade is very much about the box ticking, the checks and balances that permeate the regulation. We continue to see a drift towards a more utilitarian approach in post-trade – as we noted last year, the more focused the rules get, the less room for manoeuvre there is, therefore collaboration is probably the way forward.
Best Traders Platform P&L Report Card This award has historically been about information and interaction – providing traders with the right information in an easy to read format, preferably on the same desktop (or mobile device) as their pricing. Traders have always relied upon analytics because their decision making process has to be as informed as it can be if they are to succeed, especially in today’s event-driven markets. This means a clean dealing tile – the origins of this award – remains important for GUI traders, and we would highlight that GUI traders typically offer better value to a provider bank than a fully automated client. It equally means interactive execution tools, backed up by great analytics.