Remember to download and subscribe to In the FICC of It at the Apple iTunes store and this week you can enjoy Colin Lambert and Galen Stops stepping into tricky territory by discussing actual economic things! As always seems to be the case Lambert is mystified by a US government decision, while Stops suddenly has […]
As technology continues to shape financial markets, what are the implications for how FX products are traded in Latin America? The electronification of markets in continuing apace, yet many FX products outside of the spot market have proven stubbornly resistance to this trend. What are the barriers to automating NDFs, swaps and options, and are […]
The FX Global Code of Conduct remains one of the biggest initiatives in the foreign exchange industry for many years, wide a wide spectrum of different market participants around the world participating in the creation of the principles contained within it. But given that the Code was introduced to address a specific issue – evidence […]
Carlos Mosquera Benatuil, the CEO of Mexico-based Solidus Group, which focuses on digital finance through its crypto hedge fund, Solidus Capital, and crypto OTC desk, Solidus Markets, talks to Profit & Loss about why cryptoassets are more than just a vehicle for speculation in Latin America.
Profit & Loss: What are some of the key differences you see between crypto trading in Latam compared to the US?
Carlos Mosquera Benatuil: So there are only a few places for cryptoasset price discovery in Latam, but the bigger exchanges are pretty good. The market still lacks sophisticated traders, however, which has actually been a challenge for us as we’re looking to hire staff for the proprietary trading desk that we’re building out.
Edgewater Markets recently hosted an event in Lima, Peru, to celebrate the continued roll out of its new LatamFX.Pro platform. Galen Stops attended the event and sat down with the firm’s senior management to discuss why they’re making such a strong push in Latin America.
n a nutshell, the central thesis behind Edgewater Market’s Latam strategy is that their technology can be used to convert the NDF market into an NDF trading platform and thereby enabling local market participants to aggregate, consume and distribute FX rates more efficiently.
LCH is now actively clearing trades on behalf of a Mexico-domiciled participant.
BBVA Bancomer completed a cleared Mexican peso denominated TIIE interest rate swap, with BBVA SA Madrid acting as the clearing broker.
The transaction marks the first time a Mexican participant has used LCH SwapClear, following LCH’s recognition as a Foreign Central Counterparty (CCP) by Banco de México earlier this month.
John Horkan, LCH Group COO and head of North America, says: “We’re excited that BBVA Bancomer has become the first Mexican participant to clear its interest rate derivatives at SwapClear. This milestone swiftly follows LCH’s recent recognition as a Foreign CCP by Banco de México, allowing Mexican entities the benefit of accessing the global liquidity available in SwapClear.”
LCH has obtained recognition as a central counterparty from the Banco de México.
The recognition for LCH’s SwapClear Service is effective from 22 June 2018 and provides a greater choice of CCPs to those participants affected by the Mexican clearing mandate.
With this recognition, LCH can expand clearing to Mexican-domiciled market participants to support their interest rate derivatives trading activity.
LCH will continue to offer clearing to global participants for Mexican Peso-denominated interest rate derivatives as one of the 21 currencies offered by SwapClear. LCH clears for members and their clients based in 55 countries.
Banco Monex has joined as a CLS settlement member, becoming the 70th firm to assume the status.
“I could not be more pleased to welcome Banco Monex as the first Mexican bank to participate directly in our settlement service,” says David Puth, CEO of CLS.
“Participation in CLS Settlement continues to grow, and our settlement members, such as Banco Monex, play a critical role in ensuring market participants have access to the highest standard of risk mitigation to support their trading operations and enable us to deliver a safer and more stable FX market. We look forward to continued growth in the Mexican market.”
Mauricio Naranjo, CEO of Grupo Financiero Monex adds, “Joining CLS as a member with direct participation in the CLS settlement service is an important milestone for Banco Monex. The Mexican peso is the most actively traded currency in the Latin American region and mitigating settlement risk is a key priority for many institutions. Participation within the CLS ecosystem will enable us to achieve this goal for our operations and through time for our clients as third parties, while significantly enhancing liquidity efficiencies for the Mexican market.”
Although cryptocurrencies have become too big for institutional investors to ignore, there are still significant barriers deterring them from entering the crypto space, said speakers at Profit & Loss’ 2018 Latin America conference in Mexico City.
Speaking on a panel at the event, Michael Moro, the CEO of Genesis Trading, argued that a lot of traditional financial services firms were caught out by both the popularity and the longevity of crypto-assets.
“I believe that – especially in the US – that the major institutions got caught. I don’t believe they ever wanted to deal in cryptos, they thought it was a fad or a ponzi scheme and were waiting for the bubble to burst and the whole thing to go away.
In an interview at Profit & Loss Latin America 2018 conference, Gary Flagler, Head of International Business Development, Derivatives, at MexDer, talked about the Mexican exchange’s future growth plans.
Profit & Loss: What’s been your focus since you joined the exchange last year?
Gary Flagler: We can sum up our international initiative in one word and three parts, and that word is: Connectivity.
When I talk about connectivity, I’m talking about connectivity to international clients, whether they’re professional trading groups, hedge funds, commodity trading advisors, asset managers and, to a lesser extent, banks, corporates, mutual funds, pension funds and retail.