Have Buy Side Firms Been Asleep at the Wheel?

In recent years the sell side has justifiably been criticised for its behaviour in the FX market. But should regulators and market participants be taking a closer look at how the buy side operates in this market? Galen Stops reports. The FX industry has been rocked by a number of scandals in recent years and in many cases the implications of these scandals is only now coming home to roost. Two of the largest custodian banks in the world, BNY Mellon and State Street, have agreed $714 million and $530 million settlements, respectively, related to allegations they systematically set disadvantageous rates for their customers in contrast to their claims to be achieving best execution for them.
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The FX Consolidated Tape: A Perennial Chicken and Egg Problem

At this point it is widely known in the FX market that there is an initiative underway, being spearheaded by FastMatch, to build a consolidated tape for FX, similar to the one that exists in equities. But given the differences in market structure between these two asset classes, what does an FX tape look like […]
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The Future of FCMs: Adapting to Survive

The plight of Futures Commission Merchants (FCMs) in recent years has been well documented. But can they adapt to survive and where are there parallels with the changes taking place in FX prime services? The FCM business model has been under strain post-financial crisis as the low interest rate environment has reduced their income, while […]
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As RMB Internationalises, Questions Arise Around Settlement

A turning point year for the Chinese currency, 2015 foretold a new era for the RMB. As the currency gains in prominence, China faces decisions around settlement mechanisms, which will be crucial to its acceptance as a truly international currency. Galen Stops reports. In a year in which FX trading volumes have generally been depressed, […]
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NBIM Steps into the Last Look Debate

In the latest issue of its Asset Manager Perspective, Norges Bank Investment Management investigates the role of last look in FX markets. The fund acknowledges that the practice “serves a legitimate need” of liquidity providers and can improve liquidity available to investors, however it also notes there are “intrinsic conflicts related to the asymmetry in […]
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Under the Hood of the LCH.Clearnet, CLS Partnership

LCH.Clearnet and CLS announced plans this summer to launch a service for clearing deliverable FX products. But how exactly will the new system work and is there really demand for this type of service? Galen Stops investigates. In August, LCH.Clearnet and CLS officially announced the long-awaited partnership between a CCP and the FX market’s risk […]
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Mind The Gap

Is the continued technological evolution of the FX market opening up gaps in banks’ risk management capabilities? Galen Stops takes a look. The numerous benefits that technology has brought, and continues to bring, to the FX market have been well documented, but some banking sources have expressed concerns about some of the risks created as a […]
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Does Bitcoin Have a Future in Financial Services?

With financial services firms currently tripping over each other to highlight the potential applications of blockchain technology, Galen Stops looks at what this means for Bitcoin’s chances of entering the financial mainstream. There are very few topics within the financial services industry that have the ability to polarise an audience like Bitcoin. Since capturing the […]
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FX NDF Client Clearing Begins on SEFs: More to Follow?

The first centrally cleared FX NDF client trade took place on a Swap Execution Facility (SEF) last month, potentially paving the way for more clearing activity and more competition in this segment of the market. Despite no regulatory mandate to centrally clear FX NDFs traded on SEFs, Profit & Loss understands that the first cleared […]
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Catching the FX Bug

Whilst a career in FX might not be top of mind for many women, once they get a taste of the job they are hooked. Joy Macknight spoke to women in different areas of the market to uncover the attraction of FX, track their career progression and identify career-defining moments. The FX Trader Maxine Dennis, […]
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