As part of the public service duty of this column (and especially as a warning to any stag parties thinking of going there dressed as Robin Hood and his Merry Men), I feel the need to point out that a law exists in York, England, that says it is legal to murder a Scotsman within the ancient city walls, but only if said Scot is carrying a bow and arrow.
Clearly this is a law that has no basis in reality and is backward looking – however it is only slightly worse than MiFID2 when viewed through the prism of the FX market.
Tradair has rolled out enhancements to its full amount execution service, the firm claims the new logic provides “improved fill-ratios and greater execution control”.
Clients are now able to define order size above which execution is against best price from a single full amount LP, define order size below which execution is against best prices from sweepable LPs, and automatically execute at best price from sweepable LPs or a single full amount LP. The latest roll out continues a spate of ‘full amount’ releases.
Information leakage is the new “issue” in foreign exchange markets for many players (actually its just signalling risk renamed surely), and for several participants it is a question of their past catching up with them in how the LPs are not willing to help them anymore. For others, however, it is a genuine issue, but I am not sure how easy it is to solve given how everything we do online leaves a digital signature – and trading in no different.
The FX industry is advancing how it deals with certain issues, but the pipeline of areas in need of clarification and further debate shows little sign of slowing down. Two areas that concern me at the moment are exactly how platform operators are enforcing their rulebooks - are they being fair and balanced to both LPs and LCs? - and exactly what constitutes "full amount" trading? An open and data-backed discussion will solve the latter, but I wonder if we need an industry ombudsman for the former?
The band is back together again in this week’s podcast as Galen Stops returns from a short holiday to join Colin Lambert to discuss all things currency – this week (much to the relief of P&L’s audio engineers) with no interruptions from wildlife or pool attendants!
Listen is as they highlight growing concerns in the industry that it may be harder to spread the word about the FX Global Code than previously thought, thanks to the realities of life on buy side and vendor side. On the subject of transparency and ethics, Lambert is keen to talk about the new phenomena of “full amount” trading in FX markets and Stops expresses his feelings about the proposed Code of Conduct for cryptocurrency markets.
As always there is room for the random, so why does Lambert want a merger between the new digital assets association and the recently renamed Wholesale Markets Brokers Association? Listen in to find out.