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CFTC, DoJ Charges Former Tower Traders Over Spoofing The US Commodity Futures Trading Commission (CFTC) has issued an Order filing and settling charges against Kamaldeep Gandhi, in which Gandhi admits to engaging in manipulative and deceptive schemes, along with other individuals, which involved thousands of acts of spoofing with respect to a variety of futures products traded on the Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, and the Commodity Exchange (Comex). At the same time the US Department of Justice (DoJ) charged Gandhi and two alleged co-conspiritors, Bruce Mao and Krishna Mohan, with spoofing offenses and says Gandhi and Mohan have admitted to the charges.
CME-NEX Link Up Gets US Thumbs Up The boards of CME Group and NEX Group have announced they have received clearance under the Hart-Scott-Rodino Act from the United States Department of Justice – Antitrust Division for the proposed acquisition of NEX by CME and Bidco – an important step in the process to complete the acquisition.. CME and NEX have also received the relevant regulatory approvals from the UK’s Financial Conduct Authority (FCA) and regulators in the US, Germany, Italy and Sweden, and have made the requisite pre-notifications in Hong Kong.
ErisX Announces New Digital Assets Exchange ErisX is making a bet on crypto-assets with plans announced last week that it will launch a derivatives exchange (DCM) and clearing organisation (DCO) that will include fully regulated digital asset futures and spot contracts on one platform. The new venture is already backed by an impressive group of investors spanning the traditional capital markets and digital asset markets, including DRW Venture Capital, Valor Equity Partners, TD Ameritrade, Virtu Financial, NEX Opportunities, Cboe Global Markets, CTC Group Investments, Digital Currency Group, Nico Trading, Pantera Capital and Third Stone Partners. It has additional support from CMT Digital, Susquehanna International Group, XR Trading, C2 Capital Management and ED&F NMan Capital Markets Inc, which also participated in the investment round.
Bayern LB First Landesbank to Sign Global Code The FX Global Code witnessed another small milestone this when BayernLB became the first Landesbank in Germany to commit by signing a Statement of Commitment, which it has posted to the register hosted by CLS Group. The Code was launched in its entirety in May 2017 and since then a steady stream of market participants have singed up to adhere to its principles, attesting that they will operate in a fair and transparent manner and have internal workflows that are in line with the guidelines.
Virtu-ITG Tie-Up Could Bring in Coveted Real Money Sector Just a little more than a year after Virtu Financial acquired KCG Holdings, sources say the firm has been in talks since April with ITG about acquiring the tech provider. Virtu, like some of its nonbank rivals, has recently focussed on building its own client-centred business. Virtu’s acquisition of KCG last year brought with it established direct to client market making relationships, and ITG is expected to broaden the client type. Virtu declines to comment on the rumoured acquisition, but as some sources point out, Virtu’s top executives – CEO Doug Cifu and CFO Joseph Molluso – each have deep backgrounds in M&A.
NEX Markets to Allow Participants to Promote Code Adherence on Platform NEX Markets has taken a small but important step to embedding the FX Global Code further into its business by allowing liquidity providers and liquidity consumers who have registered their Statements of Commitment (SoC) to the FX Global Code to identify themselves. Hugh Whelan, global head of liquidity management at NEX Markets, says the move will help clients identify which of their counterparties on EBS Direct and EBS Select, have signed and registered an SoC on the NEX Global Code Register. “The FX Global Code is an important piece of work that will help build transparency levels in the industry further,” he says
What Will Lead  to a Decoupling  of Cryptocurrencies? As is abundantly clear from any volatility charts available for the main crypto currencies, while the degree of the swings may vary, cryptocurrencies in general tend to largely trade in tandem. But as in fiat, cryptocurrencies have their own properties and characteristics, which begs the question: What Will Lead to a Decoupling of Cryptocurrencies? The differences between bitcoin (BTC), ether (ETH) and ripple (XRP) are manifold. The simple fact that few have been able to reach consensus on whether various cryptoassets are a commodity, a currency or a security, suggests that these assets are not all the same. Some argue each of these represent, respectively, a commodity, a currency and a security. So far, just CFTC is on record saying certain cryptoassets are commodities, a view upheld earlier this year by a US federal judge, who upheld that cryptos are commodities, while the SEC has said BTC and ETH are not securities. So official designations have been murky at best.
Changing Market Structure a Challenge to Central Banks’ Monitoring of FX Markets: BIS The Bank for International Settlements’ Markets Committee has released a report by a recently-formed study group, which looks at the evolution of what it terms fast-paced electronic markets, focusing mainly on spot FX, and the challenges this evolution has for central banks. The report says the market structure changes have implications for central banks’ approaches to market monitoring, including the range of participants with which they engage, the types of data they collect, and the tools and technologies they utilise.
Is the FX Global Code of Conduct Working? The FX Global Code is now over one year old and is generally seen to have been a success in establishing a blueprint for conduct in the markets. The number of firms adopting has been steadily growing but at such an uneven pace that some are wondering exactly how successful it will be? Next week’s Forex Network Chicago conference will kick off with an armchair debate and a panel session looking at the impact of the Code from two perspectives.
And Finally... It is widely believed that it is inevitable that technology will assume more control of the decision making in markets, but I for one, hope it does not, for I don't believe the outcome would be particularly good. At the moment technology dominates the execution of strategies, but the decision making is still a more balanced process with the human very much involved – which to me is a good, because what we need is a good blend of human and machine if we are to continue to see risk takers.