GFXC Survey Confirms Increased Code Adoption, but Work Still Required

The 2018 FX Global Code Survey results have been released and while, expectedly, the last year saw significantly increased adoption rates amongst firms, there are areas of potential concern for proponents of the Code. The survey aims to measure the awareness, adoption, implementation, and effects of the Global Code for market participants. The GFXC says the information collected through the 2018 survey is an important input as it continues to promote, maintain, and update the Code and embed it in the fabric of foreign exchange markets.
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“Cover and Deal? Model Requires Role Disclosure – GFXC

A second working group set up by the Global Foreign Exchange Committee (GFXC) in 2018 to look at how market participants operating the “cover and deal” model utilise last look has published a paper highlighting areas in which it believes practice can be improved. Primarily, the report stresses the importance of those operating cover and deal models ensuring that there is adequate disclosure of the practice, the way in which it is being used, and the clarification of the role and capacity in which the participant acts.
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GFXC Releases Initial Views on Anonymous Venue Disclosures

As part of its report on disclosures and transparency, the Global Foreign Exchange Committee (GFXC) has unveiled some initial views on a second stream of work by its disclosures working group on practices in the anonymous e-trading platform sector. The work centred on the knowledge of counterparties and expectations around counterparty behaviour, although the report does note that given that the landscape of e-trading platforms is diverse with different features and business models across infrastructure providers and users, the working group will continue work to consider this portion of the disclosure landscape
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GFXC Publishes Disclosures Report

A Global Foreign Exchange Committee working group has released a paper on the role of disclosure and transparency in FX markets intended to serve as a source of information for market participants seeking to learn about, develop and navigate the FX disclosure landscape. The paper is the work of a special working group set up by the GFXC to study the issue after feedback on last look practices highlighted concerns amongst participants that disclosures and transparency levels could be enhanced.
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RBA Report Casts the Net Wide in Seeking Flash Crash Answers

A report in the Reserve Bank of Australia’s Statement on Monetary Policy looks at the flash event in FX markets on January 3 when the yen appreciated some 3% in a matter of seconds before falling back, but fails to discern a single factor behind the move. Citing the fragmentation of the FX markets across an increasing number of different platforms, the RBA says “it is difficult to draw firm conclusions on the cause of the flash event”, adding that three factors are likely to have contributed to what it terms the “brief deterioration in market conditions”.
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Refinitiv Reappointed as Malaysian Benchmark Agent

Refinitiv has been re-appointed by Bank Negara Malaysia as the calculating and distribution agent for the industry interest rate benchmark, Kuala Lumpur Interbank Offered Rate (Klibor). As the official indicator of conditions in the interbank money market in Malaysia, Klibor offers market participants from both buy-side and sell-side a reliable reference for various investment and product uses, such as portfolio valuation and compliance reporting. Introduced in 1987, the rate refers to the average interest rate at which term deposits are offered between selected banks in the Malaysian wholesale money market or interbank market. Klibor rates give market participants an indication of market rates for the trading day. In particular, they are used as reference for diverse financial products including interest rate swaps, options, futures and structured products both within and outside Malaysia.
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Former UBS Trader Fined by US Court for Spoofing

A US District Court in Connecticut has issued a Final Judgment and Consent Order against Andre Flotron, a former precious metals trader for UBS, requiring him to pay a $100,000 civil monetary penalty for spoofing and engaging in a deceptive or manipulative scheme through his spoofing in violation of the Commodity Exchange Act (CEA) and CFTC Regulations. The Order also imposes a one-year trading and registration ban. Flotron was one of eight traders from three institutions charged by the Commodity Futures Trading Commission (CFTC) over a spoofing scheme.
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Competition Comes to the Volatility Index Market

Miax Options has unveiled plans to launch volatility trading on the Spikes Index, thus, it says, “marking the end of exclusivity in the volatility market. The firm will list and trade cash-settled options on Spikes, a measure of the expected 30- day volatility in the SPDR S&P 500 ETF (SPY), the most actively-traded exchange traded fund in the world. Spikes was created by T3 Index, a research-driven financial indexing firm, as part of a partnership with Miax Options’ parent holding company, Miami International Holdings.
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RMB Securities Added to Bloomberg Indices

Chinese RMB-denominated government and policy bank securities are set to be added to the Bloomberg Barclays Global Aggregate Index.The inclusion in the index will start in April 2019 and be phased in over a 20 month period.When fully accounted for in the Global Aggregate Index, local currency Chinese bonds will be the fourth largest currency component following the USD, EUR and JPY. Using data as of January 24, 2019 the index would include 363 Chinese securities and represent 6.03% of a $54.07 trillion index upon completion of the phase-in
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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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