Tag: forwards

forwards

Is It Time to Change the Credit Model in FX?

In a new video interview with Profit & Loss Rick Schonberg, global head of ForexClear product development at LCH, is unequivocal in expressing his view that the current credit model in the FX industry is due for a change. “The model definitely needs to change,” he says. “What’s interesting is that the BIS numbers —  […]

HKEX Eyes FX Clearing Growth

Hong Kong Exchanges & Clearing (HKEX) becomes the latest major exchange group to identify FX clearing as a growth area, after announcing last week that its OTC Clear service handled its first deliverable FX swaps and forward contracts. The banks involved in the transaction – which was hailed by HKEX as “a step forward in […]

LCH Adds Deliverable FX to Clearing Offering

Clearinghouse LCH has announced that it has expanded its deliverable FX offering to include FX forwards, meaning members of it ForexClear service are now able to clear this product in eight currency pairs, AUDUSD, EURUSD, GBPUSD, USDJPY, USDCHF, EURJPY, EURCHF and EURGBP, with physical delivery. The product extension builds on the launch of deliverable FX options […]

CLS Volumes Remained Flat in August

The average daily volume (ADV) submitted to CLS was $1.75 trillion in August, flat compared to the previous month. However, this figure represents a 9% year-on-year increase. This flat month-on-month figure is in contrast to the primary venues, which saw an increase in trading activity in August, while Euronext FX, Cboe FX, FXSpotStream and Integral […]

CLS Volumes Reflect April Slowdown

The average daily volume (ADV) of FX trades submitted to CLS in April was $1.63 trillion, down 12.5% from the $1.86 trillion reported in March 2019. This is consistent with previous reports from Profit & Loss showing that the multibank FX trading venues which publicly release their volumes all saw double digit decreases in percentage […]

CLS Volumes Tick Up in March

The average daily volume (ADV) of FX trades submitted to CLS was $1.86 trillion last month, up 8% compared to February but largely flat compared to March 2018. The ADV of spot trades submitted to CLS was $439 billion, up 9.2% month-on-month and but down 8.5% year-on-year. The ADV of swaps was $1.31 trillion, up […]

P&L Talk Series With: Kate Lowe

Kate Lowe, global head of trade services at State Street, talks to Profit & Loss about how new margin requirements could shape buy side behaviour in the FX market, and why 2019 is likely to be a “staging” year for many of these firms.Profit & Loss: As you’ve been talking to clients at the start of 2019, what’s been the major areas of focus for them?Kate Lowe: Well one of the big talking points at the moment is the impact that the uncleared margin rules (UMR) are going to have on the industry. In September this year, the threshold for firms that have to post initial margin for u

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.

Citi, Eaton Vance Clear First FX Cash-Settled Forwards

Citi and Eaton Vance Management have cleared the first FX cash-settled forwards at CME Group. CME cleared the two EUR/USD trades on January 15. The exchange group currently offers clearing for 26 currency pairs of FX cash-settled forwards and 11 pairs of NDFs.“CME Group is pleased to clear our first cash-settled forwards, which provide a new capital-efficient way for our customers to trade G10 foreign exchange. This first cash-settled trade, combined with the recent increase in our non-deliverable forward clearing volume in late 2018, allows us to work with our clients, clearing members and liquidity providers to help customers mitigate their risks through cleared solutions,” says Sean Tully, global head of financial and OTC products at CME.

Industry in Alignment Over CFTC Swap Dealer Rules

There appeared to be a broad consensus in the responses to the Commodity Futures Trading Commission’s (CFTC) proposed swap dealer rules that the Commission should retain the current $8 billion de minimis threshold for swap dealer (SD) registration and that NDFs should be excluded from the threshold calculations.

Since 2012, Commission regulations have stated that market participants will not be considered a “swap dealer” unless they trade over $8 billion per year in aggregate gross notional amount (AGNA). This $8 billion threshold was meant to be a temporary phase-in period, with the threshold ultimately due to be reduced to $3 billion.