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CLS Volumes Dip Slightly in July The average daily volume (ADV) submitted to CLS was $1.6 trillion in July, down 2% month-on-month, but up 11.9% year-on-year. CLS recorded an ADV of $1.04 trillion in swaps in July, down from $1.08 trillion the previous month. Spot ADV submitted to CLS in July was $453 billion, basically flat from the $455 billion recorded in June. The ADV of forwards products submitted to CLS last month was $101 billion, down from $108 billion in June. However, year-on-year, forwards ADV in July was up 46%, while spot ADV was up 13.9%. By contrast, the spot ADV submitted to CLS in July 2016 was $446 billion, only 1.6% less than July 2017.
ING Launches EM FX Indices ING is launching proprietary global emerging markets indices, aiming to provide clients with a new route for gaining exposure to emerging markets currencies. Bloomberg is responsible for providing the independent calculation and administration of these indices. In addition to leveraging Bloomberg's expertise in strategy index development, calculation and administration, ING is using Bloomberg’s BFIX data source to use in the index, stating in a release issued today that it is an independent benchmark for currency rates that is regularly updated and widely used by the FX market.
Five More Banks Settle Benchmark Claims Five banks have filed to settle a class action lawsuit brought against them over FX benchmark manipulation claims. According to papers filed in New York, the settlement agreements resulted from “arm’s-length negotiations between highly experienced counsel and fall within the range of possible approval”. Morgan Stanley has agreed to pay $50 million; Societe Generale $18 million; Standard Chartered Bank $17.2 million; Royal Bank of Canada $15.5 million; and Bank of Tokyo-Mitsubishi UFJ $10.2 million. All five banks continue to deny wrongdoing.
ECB Encourages Commitment to Global Code by May 2018 The European Central Bank (ECB) is publicly endorsing the statement of Commitment set out in the FX Global Code of Conduct and is encouraging FX trading counterparties to do the same. The FX Global Code is a set of global principles of good practice in foreign exchange markets, developed by central banks and market participants from 16 jurisdictions around the globe in order to promote a robust, fair, liquid, open and appropriately transparent market. Today the ECB invited FX market participants to publicly commit to the principles set out in the Code by endorsing the statement of commitment annexed to the Code by the end of May 2018.
Deutsche, JPM Move to Settle Libor Class Action Deutsche Bank and JP Morgan have filed court documents seeking to settle a class action claim brought against them and other market participants over alleged Yen interest rate benchmark manipulation. The documents were filed Friday in the US District Court of Southern New York and while the two banks do not admit liability or wrongdoing, Deutsche has agreed to pay $77 million and JP Morgan $71 million. These settlements are more than double those agreed by HSBC and Citi last year.
CLS Volumes Up in June The average daily volume (ADV) of trades submitted to CLS was $1.64 trillion in June, up 6% from $1.55 trillion in May, and up 1.64% year-on-year. The main driver of this growth appears to have been an increase in swaps and forward activity. Swaps accounted for $1.08 trillion of the ADV submitted to CLS in June, up 9.3% month-on-month and 7.5% year-on-year. The ADV of $108 billion in FX forwards in June represented a 3.8% increase from the previous month and a 20% growth from June 2016, when an ADV of $90 billion was recorded.
BNP Paribas Agrees $246m FX Settlement BNP Paribas (BNPP) has agreed a $246 million settlement with the Board of Governors of the Federal Reserve System (FRB) relating to past misconduct in its foreign exchange business. The settlement will be covered by existing provisions. This follows the announcement by BNPP of a settlement with the New York State Department of Financial Services on the 24th May relating to the same issue. In reaching this settlement, the FRB acknowledged the bank’s group-wide remediation initiatives and the full cooperation of BNPP in the investigation.
Six Banks Face Lawsuits over Last Look Six banks are facing a class action lawsuit over alleged abusive practices involving the use of last look in their e-FX businesses. The six, BNP Paribas (which has already been fined by the New York Department of Financial Services for, amongst other things, it’s broad use of last look), Citi, Credit Suisse, Goldman Sachs, Morgan Stanley and Royal Bank of Scotland face a claim from former retail broker-dealer Alpari (US) in the hundreds of million of dollars according to documents filed in a New York court this week.
Report: Top Dealers Loosen Grip on FX Market (Slightly) The top five FX dealers are losing market share, according to a new report from Greenwich Associates. Although the world’s five biggest FX dealers still capture a massive 44% of global market share in aggregate, according to the research, that proportion is down from 48% last year and from 53% in 2013. The report identifies several trends that are driving these changes. It says that while top-tier dealers have been narrowing the scope of their product, regional and client coverage, FX investors continue to increase their trading via multi-dealer platforms, which create a more level playing field for liquidity providers.
Ktorza Ruling Overturned A UK appeals court judge has decided that former JP Morgan FX salesperson Patrice Ktorza’s case must be reheard by an employment tribunal. In a judgement, Judge David Richardson accepted the bank’s claim that the original judge who head the case had adopted “a legally incorrect” approach to the law and “disregarded or misunderstood” important aspects of JP Morgan’s case. Ktorza won his claim for unfair dismissal in August 2016, however Profit & Loss noted at the time that the case was “tricky” because it involved the subject of partial fills of client orders.