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Former JPM FX Trader Indicted in US The US Department of Justice has announced it has brought an inductment against former JP Morgan EM FX trader Akshay Aiyer for his role in alleged FX market manipulation. Aiyer is specifically charged with conspiring to fix prices and rig bids and offers in Central and Eastern European, Middle Eastern, and African (CEEMEA) currencies. According to the indictment, from at least as early as October 2010 through at least July 2013, Aiyer, along with other New York-based CEEMEA traders working for rival banks, participated in a conspiracy designed to suppress competition in order to increase each trader’s profits and decrease each trader’s losses.
FMSB Issues Suspicious Transaction Reporting Guide The FICC Markets Standards Board has publishes a transparency draft of a new Statement of Good Practice on Suspicious Transaction and Order Reporting. The Statement covers the identification of suspicious transactions and orders and their reporting to the relevant regulator. In the UK and other jurisdictions regulated market participants have an obligation report such transactions to their regulator – in the UK this is as a Suspicious Transaction and Order Report submitted to the FCA. A suspicious transaction or order is one where there is a reasonable suspicion that it could constitute insider dealing, market manipulation or attempted insider dealing or market manipulation.
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."