Naturally, when I thought about a column highlighting an area in which I am concerned the foreign exchange industry is being less than totally transparent – in an operational sense – my first thought was a Kate Spade handbag. That my thought process then led to the film Under Siege 2 is, I will confess, a little concerning, but don't worry about it too much, because both are relevant.
After all, if we are selling anonymity, surely we should actually be providing it?
There are those in the FX world who believe the narrative of a return to bilateral, relationship-based trading was driven by a group of liquidity providers talking their book. Looking at the numbers in last week’s FX committee turnover surveys, specifically the spot e-trading statistics from the UK and US, I think it is fair to say that the cynicism is wrong, or the narrative is working, or both, because the last two years has seen a definitive shift in trading away from anonymous venues towards disclosed channels.
In this week’s podcast Colin Lambert attempts to sound informative on all things crypto, while Galen Stops is informative on all things crypto. They also discuss the shift in FX trading from anonymous to disclosed channels and its impact on last look as well as the latest on pre-hedging from the Global FX Committee. There is also time for one to bang on about a correct prediction (to date) made at the start of the year and they also touch on "de-centralised" crypto trading platforms and realise it's just like the FX options market in the 1980s.
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