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Code of Conduct

Flow Traders: Standing Out from the Crowd

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Robbert Sijbrandij, head of FX at Flow Traders, talks to Galen Stops about why he thinks there’s still room for more non-bank liquidity providers in the FX market.Dutch proprietary trading firm, Flow Traders, has spent the past two years building out its FX business line. The firm trades in the region of €750- €800 billion of ETFs per year, of which roughly two-thirds has an FX angle, meaning that Flow Traders was already doing in the region of €2-3 billion of FX on a busy day before they decided to become a liquidity maker in FX.

Is the Johnson Appeal Raising the Stakes for the FX Market?

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Written testimony has been lodged relating to former HSBC FX trading head Mark Johnson’s appeal against his conviction for wire fraud in the US and it contains a few surprises – some of which may indicate stronger implications for the FX industry than the original trial, as Colin Lambert discovers.The original trial of HSBC’s former global head of FX trading Mark Johnson was widely seen in the FX industry as being, aside from the outcome on his personal circumstances, a single issue case – what would the US legal system say about pre-hedging? The initial outcome – which is now being appealed – was a conviction and a jail sentence under the very broad umbrella of “wire fraud”, a decision that was seen as potentially having an impact on the FX Global Code, which explicitly (under certain circumstances), endorses the practice.

Is the Johnson Appeal Raising the Stakes for the FX Market?

Posted on by

Written testimony has been lodged relating to former HSBC FX trading head Mark Johnson’s appeal against his conviction for wire fraud in the US and it contains a few surprises – some of which may indicate stronger implications for the FX industry than the original trial, as Colin Lambert discovers.The original trial of HSBC’s former global head of FX trading Mark Johnson was widely seen in the FX industry as being, aside from the outcome on his personal circumstances, a single issue case – what would the US legal system say about pre-hedging? The initial outcome – which is now being appealed – was a conviction and a jail sentence under the very broad umbrella of “wire fraud”, a decision that was seen as potentially having an impact on the FX Global Code, which explicitly (under certain circumstances), endorses the practice.

Flow Traders: Standing Out from the Crowd

Posted on by

Robbert Sijbrandij, head of FX at Flow Traders, talks to Galen Stops about why he thinks there’s still room for more non-bank liquidity providers in the FX market.Dutch proprietary trading firm, Flow Traders, has spent the past two years building out its FX business line. The firm trades in the region of €750- €800 billion of ETFs per year, of which roughly two-thirds has an FX angle, meaning that Flow Traders was already doing in the region of €2-3 billion of FX on a busy day before they decided to become a liquidity maker in FX.

Has FX Turned a Corner?

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Now that MiFID II is in force and the industry has had time to digest the Global Code of Conduct, platform providers will face less distractions in 2019, says Galen Stops.In the second half of 2017 it seemed as though many FX market participants, on both the buy and sell sides, were forced to shelve any business plans that they might have as resources were diverted to help ensure compliance with MiFID II ahead of the deadline on January 3, 2018. Preparations for MiFID II cost an estimated $2.1bn in 2017 alone, according to a report by Expand, a Boston Consulting Group company, and IHS Markit, and this does not account for the amount of manpower and time that was also devoted to ensuring that everything was ready within these firms ahead of the deadline.

Has FX Turned a Corner?

Posted on by

Now that MiFID II is in force and the industry has had time to digest the Global Code of Conduct, platform providers will face less distractions in 2019, says Galen Stops.In the second half of 2017 it seemed as though many FX market participants, on both the buy and sell sides, were forced to shelve any business plans that they might have as resources were diverted to help ensure compliance with MiFID II ahead of the deadline on January 3, 2018. Preparations for MiFID II cost an estimated $2.1bn in 2017 alone, according to a report by Expand, a Boston Consulting Group company, and IHS Markit, and this does not account for the amount of manpower and time that was also devoted to ensuring that everything was ready within these firms ahead of the deadline.

10 Firms Join to Create Code of Conduct for Digital Asset Markets

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Ten financial services and technology firms leading developments in the digital asset and blockchain space have joined together to create the Association for Digital Asset Markets (ADAM) to establish a Code of Conduct for emerging digital asset markets.

US-based ADAM will proactively seek comprehensive standards for digital asset market participants. The group, which includes BitOoda, BTIG, Cumberland, Galaxy Digital, Genesis Global Trading, GSR, Hudson River Trading, Paxos, Symbiont and XBTO, says it will work with current and former regulators to provide rules for the efficient trading, custody, clearing and settlement of digital assets.

Future guidelines will encourage professionalism and ethical conduct by all market participants, increase transparency by providing information to regulators and the public, and deter market manipulation, the group stated.

Is the Global Code of Conduct in Trouble Already?

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The opening panel discussion of this year’s Profit & Loss Forex Network Chicago conference featured an unusually frank and honest discussion about the challenges associated with implementing the FX Global Code of Conduct. 

I t has been well documented that buy side firms have been much slower than their sell side counterparts to commit to the Global Code, with one panellist at Profit & Loss Forex Network Chicago highlighting that of the 452 entities that have signed the statement of commitment only 23 were asset managers. Indeed, they noted that of the asset managers that have signed the Code, the majority trade currency as their primary business, or even as their sole focus.

And Another Thing…

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In this week’s In the FICC of It podcast I mention how I like my hedge funds to be a bit “crazy” and my colleague and fellow podcaster, Galen Stops, suggests if I want to live on the edge then I should look at crypto funds. He’s right. If ever there was a crazy world, it’s crypto-land and this week highlighted this with some fantastic instances of “dolly out of the pram” tantrums! Generally speaking, when regulators talk, markets listen – not in crypto apparently, there they poke the bear!

The Buy Side and the Global Code: Patience Required

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Much has been made of the low buy side sign up to the FX Global Code, but as Colin Lambert finds out, it is likely only to be a matter of time.

Talk to senior members of the Global FX Committee and one can discern a sense of exasperation when they are asked (probably for the tenth time that day) about the lack of buy side adoption of the FX Global Code. The exasperation stems from what is the thorn in the side of the GFXC that is low adoption rates.

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