The International Swaps and Derivatives Association (ISDA) has published a set of best practices for central counterparties (CCPs), aimed at ensuring greater consistency in risk practices at CCPs across the globe.
The recommendations follow a default at Nasdaq Clearing last September, which exceeded the defaulting member’s margin and default fund contribution and required the use of mutualised resources – the second such event in five years.
The paper highlights steps that can be taken to minimise the potential for a member default to impact other members and the financial system as a whole, except in an extreme stress event.
Kyriba, a provider of cloud treasury and finance solutions, has reached an agreement to acquire FiREapps, a firm that provides enterprise currency management solutions to corporate treasuries.“FX volatility is a major strategic challenge for treasury organisations,” says Kevin Permenter, senior research analyst for enterprise applications at IDC, a technology analyst firm. “Financial leaders doing business in multiple countries should be looking to adopt a more holistic approach to their global risk management strategies.”In a release issued today, Kyriba says: “The acquisition will create a highly advanced solution for managing global FX risk, including data gathering and consolidation, reporting, analytics, decision support, payments, hedge accounting and more. The combined result is a faster, more efficient way to manage FX exposures than using old school processes involving spreadsheets and manual data gathering across multiple systems.”
Traiana is now providing direct central clearing connectivity to the Hong Kong Exchanges and Clearing’s (HKEX) OTC Clearing Hong Kong (OTC Clear).Market participants can now access HKEX’s OTC Clear service to clear USD/CNH and USD/HKD FX forward and swaps, via Traiana’s Clearing Hub (CCP Connect), which provides affirmation, matching and trade processing.The OTC Clear deliverable FX service can be used to mitigate settlement risk that arises when payments and receipts of currencies occur at different intervals during a standard bilateral settlement process. The service can also be used to offset settlement exposure with its clearing house cross currency swaps service.
I have previously argued that the FX industry needs to pay attention to the outcome of the Mark Johnson trial. Reading through the appeal documents, however, indicates the stakes have been raised. The prosecution's original case was, in my opinion, flawed when looking at how the FX market works, but the new charges take this to a new level and they throw into a harsher light the reluctance of certain trade associations to engage and educate the US authorities earlier in this case - we can only hope it is not too late.
QCAM Currency Asset Management has announced that Gary Klopfenstein will serve as a senior strategic advisor to the company. In the role, he will advise QCAM on both business and trading strategies with a focus on expanding the firm’s capabilities and extending its reach to a global client base.
Klopfenstein is a pioneer in the specialist currency management industry and has wide ranging experience in alternative investment management, having been a senior managing director at Mesirow Financial in Chicago where he established the currency management practice and built it to over $50 billion in less than 10 years.
China has fundamentally changed its approach towards RMB internationalisation, according to BNP Paribas China’s chief China economist, XD Chen.Speaking at a briefing in New York today, Chen explained that for the past five years the authorities in China had one main policy stance regarding the renminbi: to promote the internationalisation of the currency.However, he then added: “But now this policy stance, in our observation and together with our policy consultation, is no longer. In other words, they’re not going to use the government’s force to promote renminbi internationalisation, instead they will follow market forces.”
TransFICC has appointed Godfried De Vidts as a regulatory affairs advisor. Prior to this appointment, De Vidts was the director of European affairs at NEX Group, where he advised on European financial and political issues and led the group’s relationship with the European Commission and Parliament. Throughout his career, De Vidts has been a member of various official working groups such as: the ECB Contact Group on Euro Securities Infrastructures (Cogesi), the ECB Macroprudential Policies and Financial Stability Contact Group (MFCG), and the ESMA Secondary Markets Standing Committee Consultative Working Group.
Seed CX, a licensed exchange for institutional trading and settlement of digital assets, is now offering spot trading.The exchange has opened trading on BTC/USD, while ETH/USD, LTC/USD and BCH/USD pairs will start trading later this month. “There is no shortage of digital asset spot trading markets, but none have our vision for creating an institutional-grade experience across technology, operations and compliance,” says Edward Woodford, co-founder and CEO of Seed CX. “We are getting very positive feedback from recently on-boarded customers, and we are quickly on-boarding more investors and trading firms from around the world.”In September last year, Profit & Loss interviewed Woodford about what it really means to offer an institutional grade platform in the rapidly evolving crypto market.
The defence team conducting former HSBC FX trading head Mark Johnson’s appeal against his conviction in late 2017 have filed their appeal brief to the US Court of Appeal, in which they argue that the US Government’s brief offers, “…the latest flavour of the prosecution’s many ever-shifting, imprecise, and contradictory attempts to explain just what, exactly, the crime here was, and it exposes why there was none.” It highlights a series of new arguments put forward by the Government that were not heard by the jury, as well as a series of back tracks by the prosecution side.
German asset manager 7orca Asset Management AG has expanded its use of IHS Markit’s ThinkFolio solution to include its order management and portfolio modeling solution.
Formed in 2017, 7orca is an independent German asset manager that has been using thinkFolio for over a year to support its currency overlay and short volatility investment strategies for institutional clients.
“Since establishing 7orca, we have focused on providing our clients with a quantitative investment process to actively hedge currency risks,” says Jasper Duex, CIO at 7orca Asset Management.