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Bank of England Implements Sonia Reforms The Bank of England says it has implemented its reforms to the Sonia Interest rate benchmark. The bank says its aim in reforming Sonia – the Sterling Overnight Index Average – is to strengthen a benchmark which is considered critical for the sterling financial markets. Previously, the benchmark was based on a market for brokered deposits, which the Old Lady says, has limited transaction volumes. The new benchmark now captures a broader scope of overnight unsecured deposits, by including bilaterally negotiated transactions alongside brokered transactions.
FSB Publishes Conduct Risk Mitigation Toolkit The Financial Stability Board has published Strengthening Governance Frameworks to Mitigate Misconduct Risk, which provides a toolkit that firms and supervisors can use to tackle the causes and consequences of misconduct. The toolkit completes an element of the FSB’s 2015 Workplan on Measures to Reduce Misconduct Risk to promote incentives for good behaviour through standards and codes of behaviour, such as the FX Global Code, and reforms to benchmark-setting practices. It also offers a toolkit of measures to address misconduct in wholesale markets and the FSB’s guidance on the use of compensation tools to promote good conduct.
Pragma Signs FX Global Code SoC Pragma has announcesd it has committed to adopting the principles of the FX Global Code as a market participant. The FX Global Code was launched in partnership with policymakers and market participants, and provides a common set of guidelines to promote the integrity and effective functioning of the market. By signing a statement of commitment, Pragma affirms that the principles outlined in the Code represent a series of best practices to promote a robust, fair, liquid and transparent FX market.
Axiom Global Advisors Launches Two FX industry alumni have teamed up to launch Axiom Global Advisors, a London-based consultancy that specialises in the delivery of independent business assessments and recommendations to FX Market Participants, for their on-going adherence to the FX Global Code of Conduct, which was launched in full last year. Nick Downes and Julian Gladwin, both of whom have over 30 years in the FX industry, have established Axiom and say the firm has been established to help institutions meet the demands of the Global Code.
FX Global Code Passes Milestone With just over a month to go before adherence is expected of market participants, the Global FX Committee (GFXC) has announced that “well over” 100 Market Participants have now made Statements of Commitment to the FX Global Code less than one year after its launch. The majority of these statements can be found on the eight public registers around the world that have similarly launched since the release of the Code, however there is no obligation to publish a statement on a register.
AIMA Publishes Brexit White Paper The Alternative Investment Management Association (AIMA), has published a position paper entitled Brexit and Alternative Asset Managers: Managing the Impact. The paper offers a detailed assessment of what will need to be addressed during the transition period that has recently been agreed between the UK and the EU. AIMA says it believes that addressing these points will minimise disruption for UK fund managers and EU investors when the UK leaves the EU. The analysis is based on the assumption that the UK will leave the EU’s single market and that many existing cross-border provisions in EU legislation will cease to apply for UK firms.
Mitsui & Co Settles Trades Via CLS Japanese corporation Mitsui & Co has become the first corporate to join CLS Settlement via third party access, the firm is now settling its FX transactions via Sumitomo Mitsui Banking Corporation (SMBC). CLS says Mitsui & Co’s participation “marks a significant milestone for the Japanese FX market and highlights the continued growth in CLS third-party users in Japan”. “Large corporations are increasingly looking for effective, robust and sustainable solutions to enhance how they manage risks, cash management, liquidity demands and efficiencies in their multicurrency operations,” says Rachael Hoey, head of Asia at CLS.
Bloomberg Announces Philippines FX Initiatives The Bankers Association of the Philippines (BAP) and Bloomberg have announced a series of new initiatives aimed at furthering the growth of the FX market in the Philippines. The BAP has appointed Bloomberg as the new calculation agent for the USD/PHP spot reference rate. The spot reference rate is frequently used as a benchmark by onshore and offshore banks, corporations and asset managers in the Philippines for trade execution, valuation and benchmarking of portfolios. "We are pleased to partner with Bloomberg to provide enhanced solutions to the FX community in the Philippines," says BAP's managing director, Benjamin Castillo. "These new initiatives will support the Bangko Sentral ng Pilipinas' (BSP) financial market development reforms to better organise and deepen the country's FX market. We look forward to execution efficiency, increased market liquidity and transparency leveraging Bloomberg's technology platform and industry best practices."
Will the FX Global Code Gain Traction in Mexico? A new survey from Bloomberg suggests that authorities in Mexico may face an uphill struggle when promoting the FX Global Code of Conduct amongst the local market. In the survey, which Bloomberg says more than 100 financial professionals in Mexico participated in, 39% of respondents said that they will not endorse the Code. This is in comparison to 40% who said that they are reviewing the Code, 8% who said they have signed the letter of commitment to the Code’s principles and 12% that said they have implemented Code training.  "What the survey results tell us is that many people still do not understand what the FX Global Code of Conduct is and does," said Mariana Suarez, Bloomberg's Head of Sales for Mexico and Central America.
CME Group Set to Acquire NEX CME Group is set to acquire NEX in a transaction valued at £10 per share, consisting of 500 pence in cash and 0.0444 CME Group shares. The proposed transaction has been approved unanimously by the board of directors of both companies and is expected to close, pending approvals by regulators and NEX shareholders, in the second half of 2018. "At a time when market participants are seeking ways to lower trading costs and manage risk more effectively, this acquisition will allow us to create significant value and efficiencies for our clients globally," says CME Group chairman and CEO, Terry Duffy. "As one organisation, we will be able to employ the complementary strengths of each company to serve a wider client base while diversifying our combined businesses across futures, cash and OTC products and post-trade services."