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Regulation

MAS Issues Best Execution Consultation Paper The Monetary Authority of Singapore has issued a consultation paper as part of its plans to formalise expectations for holders of a capital markets services licence, banks, merchant banks and finance companies to have in place policies and procedures to place to ensure best execution and to support fair outcomes for customers. The consultation is in tandem with MAS’ earlier proposal for a market operator to have in place measures to facilitate its members’ execution of customers’ orders in the customers’ interests, and to ensure that its handling and execution of bids and offers is conducted on a fair and objective basis.
FX Firms Behind the Curve on MiFID II: Survey A new survey by trading technology provider Integral Development Corp finds that FX market participants face a race against the clock to be fully prepared for MiFID II. In a global poll of 282 market participants last week the firm found that only 18% claimed their FX business was completely set for January 3, while one third saud they were only half ready how the requirements, which include demonstrating best execution to clients and increased reporting, will affect currency trading.
Thomson Reuters Enhances MiFID Capabilities Thomson Reuters has enhanced its reference-data capabilities, available on its integrated data and analytics delivery platform, DataScope. The firms says the platform will deliver key regulatory content and will link crucial information, such as reference data, corporate actions, entity data, end-of-day data and intraday data in an insightful and actionable way for customers to meet MiFID II requirements. In order to be compliant with MiFID II requirements investment professionals will be required to have suitable risk models that safeguard against risk exposure.
Thomson Reuters Commits to Global FX Code Thomson Reuters has signed the statement of commitment to the Global FX Code of Conduct, formally pledging adherence to the Code’s standards to promote integrity, fairness, transparency and the effective functioning of the global foreign exchange markets. Thomson Reuters has played an active role in the development of the Global Code through its membership of the Market Participants Group (MPG) and through participation in regional committees, including the London Foreign Exchange Joint Standing Committee, the Federal Reserve Bank of New York Foreign Exchange Committee, the Tokyo Foreign Exchange Market Committee, the Canadian Foreign Exchange Committee, and the Australian Foreign Exchange Committee.
Behnam to Sponsor Market Risk Committee Rostin Behnam, a commissioner at the US Commodity Futures Trading Commission (CFTC), will sponsor the agency’s Market Risk Advisory Committee (MRAC).  The CFTC also announced temporary sponsors for the Agriculture Advisory Committee and the Global Markets Advisory Committee, until additional commissioners are confirmed by the US Senate. Behnam will lead the MRAC, which advises the commission on matters related to evolving market structures and movement of risk across clearinghouses, exchanges, intermediaries, market makers and end-users. “I look forward to continuing the important work of my predecessor for this committee, which studies an area that’s critical to the Commission’s mission,” says Behnam.
New Change FX Adds Forwards, NDFs, to Service New Change FX (NCFX) has extended its independent data service to include forward points across standard tenors, non-deliverable forwards and restricted currencies. Alongside the existing NCFX Spot service, the firm says the roll out ensures it is able to provide independent FX data for analysis of any FX deal. Ahead of the implementation of the PRIIPs rules on 1 January 2018 it is obligatory for FX market users to obtain a consolidated feed of data that cannot be derived from a single dealer or platform.
CFTC Extends Swap Dealer Threshold Rule The Commodity Futures Trading Commission (CFTC) has issued an order that will keep the swap dealer de minimis threshold at $8 billion until December 2019. The one-year extension provides the CFTC additional time to complete the current data analysis and for it to consider appropriate further action. The order establishes a new swap dealer de minimis threshold phase-in termination date of December 31, 2019. Because of this action, the threshold will remain at $8 billion until December 31, 2019 instead of decreasing to $3 billion on December 31, 2018.
Former HSBC Exec Found Guilty in FX Fraud Case Mark Johnson, the head of global FX cash trading at HSBC, has been found guilty of eight counts of wire fraud and one conspiracy charge by a US court. The jurors in the Eastern District Court of New York announced the decision on Monday. They found Johnson guilty of defrauding Cairn Energy by using information provided in confidence to HSBC to about a $3.5 billion transaction to front-run the order and generate trading profits.  Johnson was arrested at JFK airport in New York in connection with this case in June 2016, as Profit & Loss reported at the time. 
Sonia Reforms in April 2018 – BoE The Bank of England has formally announced that its reforms to the Sonia interest rate benchmark will take effect on Monday 23 April 2018. The reforms, which were announced earlier this year and see Sonia replace Libor as the interest rate benchmark for UK markets, will result in the Bank of England taking on the end-to-end administration, including the calculation and publication of Sonia, broadening the coverage to included overnight unsecured transactions, and the use of a VWAP methodology to calculate the rate.
Lack of Transactions Still a Problem for Benchmarks Reform of interest rate benchmark setting processes continues but concerns remain about the lack of transactions during some of the rate setting windows, the Financial Stability Board says. The FSB has published its latest report setting out progress on the implementation of its 2014 recommendations to reform major interest rate benchmarks such as key interbank offered rates. Those recommendations included measures to strengthen benchmarks and other potential reference rates based on interbank markets, as well as developing alternative nearly risk-free benchmark rates.