The European Supervisory Authorities (ESAs) today released a statement acknowledging challenges for certain counterparties to exchange variation margin for physically settled FX forwards under EMIR by January 3, 2018.
Based on the material presented to the ESAs, it notes the implementation appears to mainly pose a challenge regarding transactions with certain end users.
The requirement to exchange variation margin for physically settled FX forwards is part of a globally agreed framework that aims to ensure safer derivatives markets by limiting the counterparty risk from derivatives trading partners, notes ESAs. The international standards state that variation margining of physically settled FX forwards is both an established practice among significant market participants and that it is a prudent risk management tool that limits the build-up of systemic risk, and thus that variation margining should apply to physically settled FX forwards.
ACI Russia, a member of ACI – The Financial Markets Association, has unveiled a Russian language version of the FX Global Code as well as plans to create the Moscow FX Joint Standing Committee, which it says will be based upon the self-regulatory organisation National Finance Association.
The association says the new committee will be supported by the Bank of Russia and participate in the activities of the Global FX Committee. At the time the Global Code was launched earlier this year the GFXC publicly encouraged regional and local markets to form their own FX committees.
NEX Group (Nex) says it has signed a Statement of Commitment to adopt the principles of the FX Global Code across its EBS FX trading platforms and NEX Optimisation services.
The firm announced the signing of the Statement of Commitment and introduced a new Nex public register at the Global Foreign Exchange Committee meeting held at the Nex offices in London this week.
The purpose of the register is to raise awareness of those that have signed their Statement of Commitment to the Code.
The Global Foreign Exchange Committee (GFXC) met this week to consider the results of its consultation over the wording in Principle 17 of the FX Global Code of Conduct, specifically relating to the use of last look, and says it has concluded that Principle 17 “should indicate that market participants should not undertake trading activity that utilises the information from the client's trade request during the last look window”.
At the same time, however, the GFXC has recognised the concerns by some involved in the feedback process that such an action would negatively impact the quote and cover, or riskless principal model
London-based boutique provider Crown Agents Bank, which is regulated in the UK, has launched a new online foreign exchange trading platform – EMpowerFX – allowing clients to gain access to “competitive prices” on both emerging market and major traded currencies.
“Our OECD-based clients depend on our ability to offer a diverse range of hard-to-find and illiquid currencies, from the Belize dollar and Ethiopian birr, to the Nepalese rupee, XAF, XOF and the Zambian kwacha,” says Chris Wilgoss, treasurer at Crown Agents Bank
The International Swaps and Derivatives Association has begun a comprehensive analysis of the issues and potential solutions related to transitioning financial market contracts and practices to new alternative risk-free rates.
The association says the analysis will include a targeted global survey of buy- and sell-side firms and infrastructure providers to identify the means by which market participants can effectively implement regional benchmark transitions, as well as highlight possible challenges. The new report will consider how interbank rates, or ‘IBORs’, are currently used across financial markets.
You won’t want to miss Blockchain for Wall Street on November 14 in New York City. It’s the annual education day presented by the Wall Street Blockchain Alliance, a non-profit trade association with a mission to act as a neutral, unbiased steward of education and cooperation between Wall Street firms.
The day will begin with a keynote presented by leading financial services blockchain vendor Symbiont, which will be joined by one of its latest customers. The morning also includes panels on a number of topics, with a focus on how blockchain, distributed ledgers and smart contracts applications are being piloted by global banks, with practical insight from representatives of Banco Santander, BlockApps, Broadridge, Chain, Credit Suisse, IBM, Microsoft, Netki, OTCXN and State Street.
The Monetary Authority of Singapore (MAS) says it will encourage key FX players to site their pricing and matching engines in the city state as it strives to become “a leading financial centre in Asia”.
In a speech delivered launching Singapore’s industry transformation map (ITM), Ong Ye Kung, Minister for Education (Higher Education and Skills) and MAS Board member, described MAS’ vision for Singapore being one that connects global markets, supports Asia’s development, and serves Singapore’s economy. The ITM was drawn up by MAS in consultation with the financial industry and the tripartite movement, MAS says.
Just a few days after his former manager Mark Johnson was found guilty of wire fraud by a New York jury, HSBC’s former head of European FX trading, Stuart Scott, has failed in his efforts to block his extradition to the US to face similar charges.
Scott was charged by the US Justice Department, along with Johnson, of conspiring to defraud Cairn Energy with regard to a large sterling buy order for the firm in December 2011. Scott continues to deny he did anything wrong.
Singapore Exchange (SGX) has expanded its US presence, opening SGX America in Chicago.
SGX says it presence in the US will enable it to better serve a growing client base in the region and meet the rising international investor appetite to access and risk manage Asian exposure.
Loh Boon Chye, CEO of SGX, says, “This is an important milestone in SGX’s international expansion strategy and reinforces our status as Asia’s most connected exchange. SGX’s knowledge of the Asian markets, and the diversity of our Asia-linked futures and options will resonate with investors in North America, who are increasingly looking East for growth opportunities across asset classes. A physical presence in the US will also better enable us to develop connectivity with the world’s largest equities and fixed income market.”