Currency trading was one of the few bright spots for CTA performance last year, according to new data from BarclayHedge, now a division of Backstop Solutions.While the Barclay CTA Index was down 2.85% for 2018, the Currency Traders Index was up 5.1% for the year, and the Discretionary Traders Index gained 2.01%.These, however, were the only two indices to post positive returns for the year.
Indices posting losses on the year were led by the Cryptocurrency Traders Index, which was down 63.24% through December. The MPI Barclay Elite Systematic Traders Index was down 5.12% for the year, the Diversified Traders Index declined 4.71%, the Systematic Traders Index dropped 4.16%, the Fin./Met. Traders Index was down 3.20%, and the Agricultural Traders Index was down 0.27%.
BitGo, a provider of cryptocurrency financial services, has partnered with Genesis Global Trading, an OTC digital currency trading firm, to provide clients with the ability to trade digital assets directly from BitGo custody.Through this partnership, client firms will be able to maintain assets in custody with BitGo Trust Company, a qualified custodian purpose-built for digital assets, while being able to get online, real-time pricing for buy and sell orders.Clients firms will also be able to execute transactions from cold storage without having to manage keys and can access Genesis’ liquidity through a network of trading partners with same day settlement directly through a BitGo Trust account.
GMEX Technologies (GMEX) has added two new products, ForumCustody and ForumWallet, to its Fusion product suite, thus providing digital custodian and vault capabilities.
The firms says Fusion delivers digitally enabled hybrid trading and post trade solutions for exchanges, clearing-houses and central securities depositories (CSDs) taking advantage of the inherent positive characteristics of both centralised and distributed ledger technology.
GMEX says that institutional investors are increasingly investing in digital assets and require custodians who are able to deliver exchange custody, self-custody or third-party management of their digital asset accounts.
Profit & Loss understands that Wai-Kwong Seck, CEO of State Street in the Asia Pacific region (APAC) and member of the bank’s Management Committee, is leaving after an eight year career. According to an internal memo seen by Profit & Loss Seck will be replaced by Ian Martin, currently EVP Asia Pacific at the bank and formerly head of Global Markets for the bank in the region.
In the memo, Ron O’Hanley president and CEO of State Street thanks Seck for his time at State Street and says, “Wai-Kwong and I have been speaking for some time about his desire to be back in his hometown, Singapore, and to do something different
Hedge funds dipped 2.61% in December, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions, meaning it was down 5.08% for the year.
The loss was less significant, however, than that of the S&P 500 Total Return Index, which dropped 9.03% in December, to end down 4.38% for 2018.
While lowering its projections for future interest rate hikes, the US Federal Reserve raised its benchmark rate a quarter-point in December. That, coupled with extreme volatility in equity markets was a major factor in December’s hedge fund downturn, BarclayHedge says.
The Futures Industry Association (FIA) has filed a response to the Basel Committee on Banking Supervision urging the adoption of FIA's suggested modification to the leverage ratio and to recognise the exposure-reducing nature of client collateral in order to align regulatory incentives.
Central clearing of derivatives was a key pillar of the G20 countries response to the post-2008 financial crisis reforms to reduce systemic risk in the financial system, however FIA argues that to date, the leverage ratio’s failure to recognise collateral has had a direct negative impact on the ability of banks to provide clearing services to customers.
Most published analysis of the legal consequences of blockchain forks has been underwhelming. Discussions often centre around the legal risks to miners and developers, questions of little relevance because of the general absence of contracts between users of public blockchains and the constellation of jurisdictions from which they operate. In other words, it will freeze in hell before anonymous developers based god-knows-where win a lawsuit against unidentified Chinese miners aggregated in a mining pool. I should add that several articles appeared to be advertorials by law firms looking for new business.
A new report from Tabb Group argues that with regulators becoming increasingly strict on OTC derivative trade reporting it is time for firms to consider a comprehensive review of the trade reporting process.
The report, Checking in on OTC Reporting Rules was authored by Tabb’s head of derivatives research Russell Rhoads, who points out that a key component to reducing risk levels in financial markets involves regulators having access to timely and accurate data. “With the new regulations mostly set in stone, now may be the best opportunity for firms to consider a comprehensive review of the OTC trade reporting process,” he says.
A new research report from JP Morgan Chase Institute highlights the impact of central bank communication choices on financial market volatility.In the report, Does the Timing of Central Bank Announcements Matter?, the authors analysed data around the Swiss National Bank’s (SNB) decision to remove the EUR/CHF floor in January 2015, and found evidence that the timing of the decision increased subsequent market volatility.This latest research builds on a previous paper released by JP Morgan in June 2018, in which it found evidence that many hedge funds had predicated trading strategies on the belief that the SNB would maintain the EUR/CHF floor at 1.20.
The FICC Markets Standards Board (FMSB) has published the final version of its Statement of Good Practice (SGP) on Suspicious Transaction and Order Reporting.The FMSB is an independent body set up by market practitioners to try and improve standards of conduct in wholesale FICC markets. It aims to bring transparency to grey areas in the wholesale FICC markets by identifying emerging vulnerabilities, clarifying and documenting practice and agreeing standards to improve conduct and market behaviour. Setting up the FMSB was one of the main recommendations to emerge from the Fair and Effective Markets Review (FEMR), which was conducted by HM Treasury, the Bank of England and the Financial Conduct Authority (FCA).