From settlement speeds to custodianship concerns and trading costs, Alexis Atkinson of NEX Markets explains why crypto and currency market structures have much to glean from each other.
“Rat poison squared” according to Warren Buffet, to “more than just a fad” as claimed by the CEO of Morgan Stanley. For every expert who thinks investing in crypto is a pathway to purgatory, there is another who thinks it is opens the doors to financial heaven. The truth is, right now, the only thing investors can bet their bottom dollar on, or perhaps bitcoin, is that the cryptoasset trading market structure will continue to evolve to meet investor demand.
The paradox of data is, as observed by panellists at Forex Network Chicago, while the data itself is becoming cheaper and more easily accessible than ever before, the resources being allocated to analysing it are increasing, bringing with it increased costs.
“The core fundamental cost of collecting data and storing and processing it is cheaper than ever,” observed John Ashworth, CEO of Caplin. “The premium is going to be on the labour force that will be doing the work on the data.”
On September 18, at approximately 1:00pm Eastern, the golden age of cryptocurrencies came to an abrupt end. At that time, the Office of the New York Attorney General dropped a report on the operations of many major cryptocurrency exchanges that found serious faults with both specific firms and the industry as a whole. Most ominously, the report stated that it had referred three platforms that had declined to provide information voluntarily to the NY AG to the “Department of Financial Services for potential violation of New York’s virtual currency regulations”
You are not, dear reader, going to believe this – I can hardly believe it myself – but today’s column represents the 500th And Finally…!
I find myself at something of a loss having unearthed this fact – obviously such an auspicious occasion should be used to deliver one of the great columns produced anywhere by anyone, full of insight and philosophy, but that would break the habit of a lifetime. Therefore, I regret to inform you, I have decided to shamelessly self-indulge.
XTX Markets’ annual report and financial statements for the year ended 31 December, 2017, show that its year-on-year profit remained largely flat at £60.98 million. In 2016 it reported a profit of £60.46 million.
In the financial documents, Alex Gerko, founder and CEO of XTX Markets, said that the profits generated last year met expectations, given the lack of volatility in the markets. He added that, rather than just profit, the key performance indicators for the company are the net trading revenues and the profit before tax.
“Revenues have grown 17%, driven by the company’s expansion into new markets and products and optimisation of existing strategies. The company’s trading strategies seek to take advantage of pricing movements in global securities that would be accentuated in periods of higher volatility in the underlying markets and securities in which the company opts to trade.
In a new report to the G20, the Financial Stability Board (FSB) has concluded that “cryptoassets do not pose a material risk to global financial stability at this time”.
While this is a welcome boost for the crypto industry, the FSB does make clear that these assets should be vigilantly monitored by authorities going forward.
As such, the FSB has requested that the Standing Committee on Assessment of Vulnerabilities (SCAV) and the Committee on Payments and Market Infrastructures (CPMI) work jointly to develop a framework for monitoring the financial stability risks related to cryptoassets with a focus on identifying potential metrics that can be used to measure these risks.
A new paper published by the UK’s Financial Conduct Authority (FCA) claims to throw new light on events surrounding the sterling flash crash of October 2016 by being the first paper to use trade reports to the FCA under EMIR to analyse how different market participants react in times of market stress and their impact on the liquidity dry-up in a flash crash.
The paper has, however, triggered some confusion amongst market participants thanks to ambiguous terminology, mainly the constant reference to “OTC derivatives”, without specifying exactly what products it is talking about.
Inaugural financial markets research from the JP Morgan Chase Institute studies trading behaviour around three major market events, and while the findings will not come as a surprise to most FX market participants – active traders were much more involved in the market than passive investors or corporate hedgers – they should prove useful to central banks as they come to terms with a changing market structure.
The research, FX Markets Move on Surprise News, was written by Diana Farrell, Kanav Bhagat and Chen Zhao at the Institute and looks at three specific surprise events, the Swiss National Bank’s decision to remove the EUR/CHF floor in January 2015, the Brexit vote in June 2016 and the 2016 US presidential election.
Profit & Loss understands that John Bannerjee, who claimed unfair dismissal against former employer Royal Bank of Canada, has won his case.
Sources say that the tribunal judge at the London Central Tribunal found that the principal reason for his dismissal was the making of a protected disclosure. The judge also found, the sources say, that Bannerjee contributed 25% to his dismissal, however the compensation awarded will be boosted by 25% because the bank failed to comply with the UK’s Advisory, Conciliation and Arbitration Service (ACAS) Code of Practice.
ACI – the Financial Markets Association (ACI FMA) is launching a new online version of its FX Global Code Certificate. The new exam will be available from 25 May 2018.
ACI says the 60-minute online exam is aimed at certifying that market participants across buy side, sell side as well as intermediary institutions, regulators, central banks, middle and back-office, operations personnel and compliance and risk officers have taken the first step towards demonstrating adherence and knowledge of the FX Global Code.