Clearing Houses Face Privacy Law Concerns

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Top Headlines

Clearing Houses Face Privacy Law Concerns – Risk Magazine (subscription)
Non-US clearing houses could face privacy law issues as a result of the trade reporting obligations placed on them by forthcoming US regulations – a clash that already affects some banks and prompted 12 national supervisors to write to the Financial Stability Board last year.

Big Banks Face Scrutiny Over Pricing of Metals – Wall Street Journal (subscription)
US officials are investigating at least 10 major banks for possible rigging of precious metals markets, even though European regulators dropped a similar probe after finding no evidence of wrongdoing.

FX Options Premiums Spike Despite Increased Vol, Trading Volumes – GlobalCapital (subscription)
Liquidity in the FX options market is being hampered as bid-ask spreads on implied volatility widen, despite a rise in vol and overall trading volumes, which has unexpectedly resulted in increased options premiums.

DOJ Requests Delay in FX Antitrust Litigation Case – Profit & Loss
The US Department of Justice has requested that a New York Federal Court halt discovery in an antitrust class action accusing major banks of manipulating the FX market, due to an ongoing grand jury investigation.

Currency Manager Calls for Swiss Franc Liquidity Inquest – Risk Magazine (subscription)
The collapse of foreign exchange liquidity during and after the huge Swiss franc move on January 15 caught market participants by surprise. Some are calling for an official enquiry.

Shining a Light on the Importance of Dark Pools – Financial Times (subscription)
As we enter the seventh year of a post-financial crisis world, it is hard to think of an area that has not suffered a knee-jerk reaction from politicians and regulators.

Dollar Inches Up on Yellen Hopes, Greek Breather – Reuters
The dollar was firmer on expectations that Fed chair Janet Yellen would keep the bank nudging towards US rate hikes.

Why There Are No Winners in the Global Currency War – Bloomberg
In a world where growth is scarce and prospects aren’t improving, an unspoken currency war has broken out. The short term pay-off might be a boost in exports, but there can be no real winners in the end.

Fretting About the Yuan – Wall Street Journal (subscription)
It’s worth savouring the irony that Beijing is intervening again in the currency market – this time to keep the yuan from falling. The currency has bumped along the bottom of its trading band for months, forcing the central bank to sell dollars and buy yuan to slow its decline.

 

 

Regulatory News

CFTC Official Questions Legality of HFT Practices – Profit & Loss
An official at the Commodity Futures Trading Commission has written a paper questioning the legality of certain high-frequency trading tactics.

CFTC Announces Members of its New Market Risk Committee – Profit & Loss
Commissioner Sharon Bowen of the US Commodity Futures Trading Commission has announced the members of the CFTC’s Market Risk Advisory Committee

Europe and Japan Agree Clearing House Oversight – FOW Magazine (subscription)
European and Japanese regulators have reached agreement to enhance cooperation on the monitoring of Japanese clearing houses in accordance with European clearing rules.

Little Hope of ‘Robin Hood’ Tax Relief for Market Makers – Financial News (subscription)
An exemption for market makers from the EU’s proposed financial transactions tax would “not fit with the philosophy” of the levy and would “drastically affect” its revenues, according to EU officials finalising the workings of the tax.

EU’s Top Court to Rule on ECB Challenge to UK Clearing on March 4 – Reuters
The ECB says clearing houses that process more than five percent of any euro-denominated security should be based in the single currency area. If the ECB prevails, clearers such as LCH.Clearnet, which handles large volumes of euro-denominated securities, may have to decamp to the currency area.

House and Senate Committees Move Forward on Information Sharing Legislation – Squire Patton Boggs
Last week, the Senate Select Committee on Intelligence began circulating a draft version of the Cybersecurity Information Sharing Act (CISA) that it plans to introduce in the coming weeks.

 

 

Company News

Citi FXPB Closes Accounts – Forex Magnates
Citi, one of the largest FX prime brokers in the world, is believed to have been reviewing accounts following the Swiss National Bank’s actions last month, with account terminations taking place as recently as last week.

Icap Faced Triple Whammy But Still Did Better Than Rivals – Financial News (subscription)
Icap is continuing to face big challenges in its industry but it has done a better job than rivals of rolling with the punches. The question now is how Michael Spencer will navigate the next decade in which his company will increasingly compete with its own clients and as revenues from its original business, voice broking, decline.

Bonuses Slashed at HSBC But Penalties Drag Profits Down Further – Financial News (subscription)
HSBC slashed the bonus pool for its global banking and markets staff last year, but the 16% drop in awards fell short of a 38% plunge in pre-tax profits at the unit, where performance was savaged by more than $1.7 billion in charges and provisions related to the FX scandal and US mortgage securities.

FXCM CEO Reveals Next Steps Post-SNB Disaster – Euromoney
After the events of Black Thursday, the CEO of crest-fallen FXCM, the FX broker, discusses the shake-up in its business model, the future for retail flows, and lashes out at the institutional FX market structure.

NDF Traders to Benefit from Advanced Liquidity and Sophsiticated Order Book at SwapEx – Forex Magnates
SwapEx, a US-based swap execution facility, has extended its core functionality for currency traders. The firm, which is an affiliate of Currenex, will offer users executable streaming prices (ESP) and limit order book execution.

Singapore Exchange CEO Bocker to Leave – Financial Times (subscription)
SGX said on Tuesday that longstanding chief executive Magnus Bocker has decided to leave at the end of June, when his current contract expires.

 

 

Market Savvy  

Greece Agreement to Test EU Tolerance Levels: Geoffrey Yu
Bloomberg
Geoffrey Yu, senior FX strategist at UBS Investment Bank, discusses the agreement over a Greek bailout extension and looks at the situation’s impact on global currency markets.

 

 

Press Releases

Spanish CCP to Clear Interest Rate Swaps
BME Clearing, the Central Counterparty of BME, has applied for authorisation to expand its activities to start clearing OTC Interest Rate Swaps, by opening a new segment within the CCP, called BME Clearing OTC IRS.

 

 

Industry Events