Top Headlines

Banks Likely to Trim Their Customer Bases – Profit & Loss (subscription)
The capital available to bank FX businesses is much reduced compared to a short time ago; the impact of the Fix fiasco is seeing more players pull back from proprietary risk taking and pushing more towards an agency model; the lessons of the SNB event are still being absorbed; and then there is the “hot” topic of last look being openly debated around FEMR and, possibly, by certain regulatory agencies. All of this is likely to lead to several players doing what some institutions did years ago, and trim their customer bases.

US Regulators Step Up FX Settlement Talks – Sky News
A settlement involving the Department of Justice, the New York State Department of Financial Services and other regulators could come as soon as the end of March, according to insiders.

US Probe Delays Barclays FX Settlement – Financial Times (subscription)
The New York Department of Financial Services’ probe of Barclays’ foreign exchange trading business is holding up a settlement of currency rate rigging allegations that other US and UK authorities are close to resolving, people familiar with the case said.

Barclays to Double Provision for FX Rigging to at Least £1bn – The Times (subscription)
Barclays is expected to more than double its existing financial provision for alleged manipulation of foreign exchange markets to at least £1 billion when it reports its annual results next week.

Dollar on Track for Eighth Month of Gains on US Data, Fed Outlook – Reuters
The dollar index slipped on Friday, pegged back by month-end selling, but was still on track for its eighth straight month of gains on better data and comments from Federal Reserve officials that bolstered bets for a rate rise this year.

Rouble Heads for Best Month Since 1990s – Financial Times (subscription)
Russia’s rouble is heading for its best month in at least two decades as stabilising oil prices and a tentative ceasefire between Moscow-backed Ukrainian separatists and the Kiev government sent investors back into Russian markets.

German Lawmakers Approve Greek Bailout Extension – Reuters
Germany’s parliament approved an extension of Greece’s bailout today after Finance Minister Wolfgang Schaeuble, who has voiced doubts about whether Athens can be trusted, promised he would not let Greece “blackmail” its eurozone partners.

China’s Yuan Slumps on Growth Worries – Wall Street Journal (subscription)
China’s yuan fell to its weakest level against the dollar in more than two years on Friday, extending a decline driven by the prospect of a slowdown in the world’s second-largest economy.

Turkish Lira Declines to Fresh Record – Wall Street Journal (subscription)
Turkey’s lira slumped to a fresh record against the dollar Friday, with losses outpacing most emerging markets peers amid a broader selloff on mounting political pressure on the country’s central bank.

Price is Sole Factor in Best Execution: Pimco – (subscription)
Dealers are trying to lure clients into thinking about best execution in terms other than pure price, a portfolio manager at Pimco argued yesterday at a conference in London. Fellow bank panellists had suggested a distinction between best price – which should be the goal of more “vulnerable” clients – and fair execution, which would serve the need of more sophisticated customers.



Regulatory News

UK Authorities Weighing Up Changes to Market Making in FX – Profit & Loss
A senior official at the Bank of England has said that regulators are looking at making changes to how market making practices are controlled in the FICC markets.

Bank of England Tightens Internal Rules After FX Investigation – Reuters
The Bank of England announced tougher rules for its staff who speak regularly with bond and currency traders, after a review last year showed a senior member of staff had turned a blind eye to market malpractice.

CFTC’s Massad Willing to Harmonise Swaps Rules with EU, Japan – Reuters
Chairman Tim Massad says discussions with international regulators had brought to light some differences between the regimes in Europe and Japan. “I am willing to consider some changes to our proposed rule in order to ensure greater consistency,” Massad told a business audience in a speech.

Giancarlo Criticises Position Limit Rules – FOW Magazine
US Commodity Futures Trading Commissioner Chris Giancarlo has again criticised the Dodd­ Frank Act’s proposed position limits rules. Giancarlo said the commission’s hedging rules represented the imposition of “federal regulatory edicts in the place of business judgement in the everyday commercial risk management”.

Esma Defends Mifid II Transparency Rules – FOW Magazine
The European Securities and Markets Authority has defended its controversial transparency rules in Mifid II just days after they were publicly attacked by the industry.

CEO Exit Seen Perfect Time for Singapore Bourse to Lose Regulatory Role – Reuters
Singapore Exchange may have just begun its search for a new CEO but investors and brokers already know what change they want to see: the bourse stripped of its regulatory powers and a rebuilding of its stock market business.



Company News

RBS Dismisses Three Currency Traders in Market Rigging Probe – Bloomberg
Royal Bank of Scotland dismissed three foreign exchange traders in the past 10 days. The three were suspended in 2013 and 2014. In addition, on Wednesday, RBS said that it had suspended another two currency traders, who specialise in emerging markets.

Citic Securities to Pay HK$780m for Majority Stake in FX Trader KVB Kunlun – South China Morning Post
Citic Securities, China’s largest brokerage by revenue, is buying a majority stake in foreign exchange trader KVB Kunlun Financial for HK$780 million.



Market Savvy  

USD Bulls Take Heart
Saxo Bank
Yesterday was potentially a watershed day for the US dollar. US Federal Reserve chair Janet Yellen almost entirely failed to provide forward guidance in two days of testimony, sending fresh USD longs packing as Fed rate moves were shifted further out over the horizon.



Press Releases

BGC Partners and GFI Group Announce Completion of Tender Offer
BGC Partners and GFI Group today announced the successful completion of BGC’s tender offer for GFI shares. The 54.6 million tendered shares, together with the 17.1 million shares of GFI common stock already owned by BGC, represent approximately 56.3% of GFI’s outstanding shares.

CFTC Requests Public Comment on Application Submitted by CME Clearing Europe Limited for Registration as a Derivatives Clearing Organisation
Comments may be submitted electronically through the CFTC’s Comments Online process, and should be submitted on or before March 27, 2015. Public application documents and all comments received are available on CFTC’s website.

RMB Strengthens its Position as the Second Most Used Currency for Documentary Credit Transactions
Last month’s SWIFT RMB Tracker covered the renminbi breaking into the top five world currencies used in global payments. This month the focus is on the use of RMB as currency for documentary credit transactions.

Japanese OTC FX Trading Volume Rockets 132% in Final Quarter of 2014
Japanese OTC FX margin volume rose 132% in the fiscal third quarter of 2014, marking a new all-time high.



Industry Events