BoE Official Sees Drift to More Exchange Trading on FX, Bonds

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Top Headlines

Bank of England Official Sees Drift to More Exchange Trading on FX, Bonds – Reuters
More business in the world’s giant bond and currency markets may move onto exchanges as part of structural changes underway amid a host of new regulation and official reviews, the Bank of England’s director for markets strategy said on Wednesday.

UK Watchdog Says Status Quo Unacceptable in Forex Market – Reuters
Trading practices in currency markets must change and good cooperation seen from the industry bodes well for a “sensible” set of reforms, Britain’s Financial Conduct Authority (FCA) said on Wednesday.

One Week on from WM/R Change – Profit & Loss (free story)
So, one week one from the changes to the WM/Reuters methodology for establishing its benchmark FX fixes, has there been any major impact on the FX markets? The answer is simply no, yes, and it’s too early to tell.

Lord Grabiner Defends BoE Evidence in FX Enquiry – Profit & Loss (free story)
The UK’s Treasury Committee has released further evidence provided by Lord Grabiner following his defence last month of the former Bank of England chief dealer Martin Mallett, provided as part of the enquiry into whether the central bank had ignored early warnings of FX market malpractice.

Hong Kong Seeks to Rival Singapore as Corporate FX Hub – Reuters
In a bid to rival Singapore, Hong Kong is introducing sweeping tax measures aimed at making it a more attractive centre in Asia for global corporations to trade foreign exchange.

Currency Volatility Slides as Yellen Stays Flexible on Rate Move – Bloomberg
Currency volatility is poised for its biggest weekly drop since 2010 after Federal Reserve Chair Janet Yellen reiterated Wednesday that the central bank’s timetable for raising interest rates is flexible.

Banks Call for Compulsory Exams for FICC Professionals – Risk.net(subscription)
Better conduct could come from proven knowledge of markets and ethics, says banks.

Bond Investors Look to FX Derivatives as Portfolio Hedge – Global Capital(subscription)
Increases in FX volatility have the potential to erode returns and raise portfolio-level volatility in international multi-asset portfolios; therefore investors are looking at using FX forwards and options as a hedge to generate superior risk-adjusted returns.

Regulatory News

HSBC Sets Aside $550 Million to Cover Additional FX Fines – Profit & Loss(free story)
HSBC put aside $550 million at the end of last year in preparation for future foreign exchange fines, just after paying out $611 million to UK and US regulators a month earlier, according to the bank’s 2014 annual report.

EU and US Struggle to Resolve Derivatives Clearing Dispute – Reuters
EU and US negotiators are struggling to move past some stumbling blocks in talks over mutually acceptable rules for derivatives clearing houses, two people familiar with the talks said.

Carney Shifts Research Focus Towards Finance – Reuters
The Bank of England needs to focus more of its research on financial markets and on the effectiveness of its new regulatory powers, governor Mark Carney said on Wednesday when he introduced a new agenda for the central bank’s researchers.

Brokers Not Reporting Enough Suspicious Activity, SEC Official Says –MarketWatch
The director of the Securities and Exchange Commission’s division of enforcement said many broker-dealers are not adequately reporting suspicious activity.

Company News

Celsing and Bauer Promoted in SEB FX Reshuffle – Profit & Loss (free story)
SEB has promoted Robert Celsing, formerly global head of FX and commodities, to global head of markets with the group, Profit & Loss has learnt.

RBS Shrinks Investment Bank, Posts £3.5 Billion Loss – Reuters
Royal Bank of Scotland (RBS) will drastically shrink its investment banking operations, pulling out of 25 countries across Europe, Asia and the Middle East and allowing the state-controlled lender to refocus on local lending in Britain.

Saxo Clients to Tell Bank Franc Repricing Must Be Reversed – Bloomberg
Retail clients at Saxo Bank are stepping up their fight to have it reverse last month’s decision to re-price Swiss franc trades.

Alpari UK Owes Citi and FXCM $11.4 Million as Majority Client Funds Pooled –Forex Magnates
In a report to the company’s creditors and clients, KPMG, which has been appointed as special administrator for the failed UK brokerage, revealed that client funds have been pooled almost in full.

Market Savvy  

Theme of Better Eurozone Data Remains Intact
BNP Paribas
Eurozone sentiment indicators came in broadly as anticipated, although one disappointing number was the services confidence, falling to 4.5 (from 4.8) versus an expected rise to 5.5. Looking forward, we anticipate gradual improvement in confidence measures. However, with the region still struggling under the weight of very large excess economic capacity and too-low inflation expectations, we do not expect improvement in activity to translate to a shift in ECB expectations or a firmer EUR.

Press Releases

ISDA Outlines Key Principles for Further Improving Regulatory Transparency and Derivatives Trade Reporting
The International Swaps and Derivatives Association (ISDA) has published a paper that outlines a number of key principles and initiatives for regulators, market participants and industry service providers in order to further improve regulatory transparency of derivatives activity.

Ex-Goldman Director Launches Bitcoin Derivatives Brokerage
Crypto Facilities, a London-based broker run by former Goldman Sachs executive director Timo Schlaefer, has launched its Bitcoin derivatives trading platformhttp://www.cryptofacilities.com.

Industry Events