Tag: Regulation

Regulation

EVIA Provides Feedback to EU on MiFIR

The European Venues and Intermediaries Association (EVIA), formerly known as the Wholesale Markets’ Brokers Association (WMBA), has published its response to a call from Germany’s Finance Ministry for feedback on MiFID II and MiFIR one year on from their implementation. In the feedback, EVIA makes a number of points and stresses its belief that foreign exchange swaps should not be covered under the regulation. EVIA does note that whilst its feedback sets out some of the difficulties and remedies in response to the premise of the call for evidence, it states that MiFID2 delivered a “great many benefits”.

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

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?

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.

Has FX Turned a Corner?

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?

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.

Nostradamus with Splinters

Having taken a look at Galen Stops’ predictions for 2018, Colin Lambert decides that overall he didn’t do a bad job, but there is an obvious reason why…Obviously having been a very generous marker over the years when assessing my own predictions from the previous year I have now swung 180 degrees and plan on being as critical as possible when looking at Galen’s five key themes for 2018. The problem is that, overall, he didn’t do too badly. Firstly, he suggested that 2018 could be the year that active currency management makes a comeback, although – and this is a theme of this review – there was a caveat because the headline ended with the words “sort of”.

Close, But No Cigar

Having taken a look at Colin Lambert’s predictions for 2018, Galen Stops finds that he was almost right with all of them. “Almost” being the operative word.…..1.“Bitcoin. That’s The Thing That Goes Up, Right?” – “The advent of futures in Bitcoin will take volatility out of the market. The cryptocurrency will end the year lower, not at zero, but in the single digits of thousands of dollars.” Colin definitely scored a hit with his price prediction, with bitcoin currently at $3,500 at the time of writing. However, he did give himself a rather generous amount of leeway by effectively predicting that it would end the year anywhere between $1 and $9,999.

P&L’s 2018 Crystal Ball – How Did We Do?

We’d all like to write our own reviews, but if the recent emphasis on third party transaction cost analysis (TCA) has taught us anything it’s that it can be beneficial to have an independent party conduct reviews too. With that in mind Profit & Loss challenged some of its readers to look over our 2018 predictions and provide feedback.Prediction: “The Great Divide” – 2018 will be all about the data and it will empower those willing to pay for it, however there will be challenges for those who cannot or will not pay up to consume and store the vast amounts of data required. Those with data will be more protective of how their pricing is used by counterparts and those without will struggle in an increasingly fragmented market as more platforms package and sell their data.

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

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.”