B2C2 Gets Green Light for Crypto CFDs

B2C2, an OTC cryptocurrency liquidity provider, has been authorised by the UK’s Financial Conduct Authority (FCA) to arrange and deal in Contracts for Difference (CFDs) with eligible counterparties and professional clients. The FCA authorisation will allow B2C2’s clients to gain exposure to cryptocurrency markets via the firm’s CFDs.Max Boonen, founder and CEO, says: “We are excited to have received authorisation from the FCA to introduce a cryptocurrency CFD product. Eligible counterparties and professional clients can now gain derivative exposure to the cryptocurrency markets, benefiting from the competitive pricing and liquidity they’re accustomed to receiving from B2C2, while avoiding the risks associated with crypto custody.”
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FX Volumes Dip from April 2018 Highs

The latest round of FX turnover data from a group of the world’s FX Committees show that volumes dipped slightly in October 2018 compared to April last year when they hit a new high mark. Average daily reported UK FX turnover was $2.6 trillion per day in October 2018. Although this is the third largest turnover figure on record, it represents a 4% decrease from the record high of $2.7 trillion reported in April 2018. Turnover by instrument was mixed in the UK. Spot increased for the third successive reporting period, gaining 3% compared to April 2018 to reach $775 billion traded per day. This represents a 14.5% year-on-year increase in volume.
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Kyriba to Acquire FiREapps

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.”
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And Another Thing…

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.
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China Shifts Approach to RMB Internationalisation

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.”
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Johnson Appeal Highlights “Ever-Shifting, Imprecise and Contradictory” Government Argument

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.
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Survey Highlights Need for Users to Rewrite Libor-Based Contracts

A survey of more than 100 firms associated with the derivatives markets and conducted by JCRA, an independent financial risk management consultancy, along with law firm Travers Smith, has found that a large majority of firms with exposure to Libor are yet to start making preparations for its discontinuation. The benchmark is set to be withdrawn in 2021, but the firms say that most of those surveyed have not started negotiating replacement language in their contracts that reference the outgoing benchmark.
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Central Banks Remain Cautious on Digital Currencies: BIS

A survey of central banks by the Bank for International Settlements (BIS) finds that while a majority are collaboratively looking at the implications of issuing a central bank digital currency (CBDC), indeed many have reached the stage of considering practical issues, they are proceeding cautiously with few reporting plans to actually issue a digital currency in the short or medium term. The survey had 63 respondents, which the BIS says represents around 80% of the world’s population, and asked about central banks’ current work on CBDCs, what motivates that work, and how likely their issuance of a CBDC is.
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And Finally…

And so, with the usual mixture of celebration and regret, we arrive at the final Accolade of 2018 – my FX Person of the Year. Obviously last year was a little controversial as I awarded it to an anonymous person (although I think I know the identity of the person concerned) and, you will be pleased to hear, this year is little different. There was a reasonable field this year, although perhaps not quite up to the standards of previous years.
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ISDA Confirms Benchmark Fallback Results

The International Swaps and Derivatives Association (ISDA) has published a report summarising the final results of a consultation on technical issues related to new benchmark fallbacks for derivatives contracts that reference certain interbank offered rates (IBORs). The report, Anonymized Narrative Summary of Responses to the ISDA Consultation on Term Fixings and Spread Adjustment Methodologies, was prepared for ISDA by The Brattle Group and confirms the preliminary findings published by ISDA at the end of November. The consultation, which was launched in July, covered the proposed methodologies for certain adjustments that would apply to the fallback rate in the event an IBOR is permanently discontinued.
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