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EBS-BrokerTec Joins FXPA
The Foreign Exchange Professionals Association (FXPA) is pleased to announce the addition of EBS-BrokerTec onto the Founders’ Council. “EBS has been a trusted partner to the global FX community for over 20 years, and it’s our pleasure to be a Founders Council member of FXPA. The group’s goal of ‘advancing a sound, liquid, transparent and competitive global currency market’ is achievable and we support them in these efforts,” says Gil Mandelzis, CEO of EBS-BrokerTec. The addition of EBS-BrokerTec brings to 21 the number of institutional members now part of FXPA.
To find out how you can support the FX industry through education, research and advocacy, visit our website at www.fxpa.org, become an institutional member, sign up for our newsletter, FXPA globalFXsource.

Banks Caught in FX Probe Braced for Legal Barrage –Financial Times (subscription)
Lawyers are rubbing their hands in anticipation of the barrage of civil lawsuits that they expect after the $5.6 billion settlements by six banks for allegedly defrauding their clients by manipulating foreign exchange markets.


Barclays, RBS Seen Facing $11 Billion More in Misconduct Costs – Bloomberg
Barclays and Royal Bank of Scotland Group, which were fined $3 billion on Wednesday for rigging currency markets, will have to set aside another 7 billion pounds for misconduct within two years, JP Morgan said.

Will the Latest Fines Change the Way FX is Traded? – Profit & Loss (free story)
In light of the “historic” fines meted out by US authorities to five global banks for conspiring to manipulate foreign exchange benchmarks such as the WMR Fix, will buy side market participants change the way they trade FX?

Banks Move to Clarify FX Practices – Profit & Loss (free story)
Following the fines levied against several banking institutions by UK and US authorities, the Royal Bank of Scotland and Barclays have published disclosure notices to their clients, explaining some of their FX practices and pricing.

Bank Fines Credited for Culture Shift – Financial Times (subscription)
Multibillion-dollar fines – such as the record settlement imposed on six banks over foreign exchange manipulation – are changing the culture of the City of London for the better, the UK’s financial watchdog has claimed. Martin Wheatley, the head of the Financial Conduct Authority said on Thursday that heavy fines were working, even though the $9 billion previously levied on banks for rigging Libor failed to deter similar behaviour among forex traders.

Investment Bank Earnings Up in First Quarter – FOW (subscription)
The world’s top banks had a strong first quarter with revenue driven by robust client activity, favourable market volatility and central bank activity, according to research firm Coalition. After a series of steady declines in recent years, fixed income, currency and commodities (FICC) revenue was up 2% year-­on­-year.

Investigators Probe $500 Trillion Interest Rate Swaps Market – Financial Times (subscription)
If banks thought Wednesday’s settlement over foreign exchange manipulation would help them draw a line under allegations of benchmark rigging, there was a nasty surprise buried in one of the settlements Barclays inked with a US derivatives regulator.

Market-Makers Tweak Algorithms Post-SNB Move – Operational Risk & Regulation (subscription)
Foreign exchange liquidity providers have been fine-tuning their pricing algorithms in the wake of the January 15 Swiss franc event. The trading shock has caused losses of hundreds of millions of dollars across the industry, as sharp moves in currency markets have continued in the months since.

Why Liquidity-Starved Markets Fear the Worst – Wall Street Journal (subscription)
Talk to almost any banker, investor or hedge fund manager today and one topic is likely to dominate the conversation. It isn’t Greece, or the US economy. It is the lack of liquidity in the markets and what this might mean for the world economy – and their businesses.

Fed Minutes Show Doubts About Strength of US Recovery – Financial times (subscription)
Doubts about the strength of the US recovery appeared to grow among Federal Reserve policy makers in their latest rate-setting meeting as soggy economic data further diminished the prospect of a rate rise in the summer.

Fischer Says Euro Area Can Survive Crisis – Financial Times (subscription)
Stanley Fischer, the vice chairman of the Fed’s Board of Governors, told a conference in Portugal that the odds were on the euro area enduring in essentially its present form, while cautioning that the outcome of the Greek crisis was still uncertain.

 

 

Regulatory News

US SEC Commissioner Stein Issues Dissent on Waivers for Five Banks – Reuters
A top US regulator issued a scathing dissent late on Thursday over her agency’s decision to grant a series of regulatory waivers to five big banks which pleaded guilty to market manipulation on Wednesday.

ECB Set for Greater Role in Clearing House Supervision – FOW (subscription)
The European Securities and Markets Authority (Esma) has confirmed the European Central Bank will have a bigger role to play in the supervision of Europe’s clearing houses due to its new role as a prudential regulator.

ECB to Stop Giving Journalists Advance Copies of Speeches – Wall Street Journal (subscription)
The European Central Bank will no longer release in advance the speeches of its executive board members to journalists under embargo, a bank spokesman said Wednesday. The decision, which has been under consideration for several months by the ECB’s communications department, is aimed at ensuring the widest possible access to ECB speeches.

Key Takeaways from the UK Review into Investment Banking – Financial News (subscription)
The UK regulator, the Financial Conduct Authority, on Friday set out the scope for a wide-ranging review into the investment banking industry. While it may seem somewhat low-key coming days after bank trading floors were fined a headline-grabbing $5.6 billion for continued misdemeanours related to benchmark rigging, the review is of significant importance. It will be the first study by the FCA into wholesale markets, which covers traditional capital markets and advisory businesses.

European Commission Asks for Input on the Implementation of and First Experience with the European Market Infrastructure Regulation (press release)
The European Commission has published a questionnaire about the European Market Infrastructure Regulation, or EMIR.

RBI Hints at Simplified FX Rules – The Hindu
The Reserve Bank of India is working with the government to simplify and liberalise procedures related to foreign exchange regulations to facilitate ease of doing business in the country.

 

 

Company News

MPs Call for Barclays Boss to Resign After Traders Continued to Rig Financial Markets – Daily Mail
Furious MPs last night called for the boss of Barclays to explain himself or resign after it emerged that traders continued to rig financial markets under his watch. The wrongdoing lasted until September last year, more than two years after Antony Jenkins took the helm with the promise to clean up the bank.

JP Morgan Accused of Skimming Profits from FX Transactions – Profit & Loss (free story)
JP Morgan is under fire again in the US civil courts after being accused of illegally assigning unfavourable FX rates to its customers.

BNY Mellon to Pay $180 Million to End FX Lawsuit – Bloomberg
Bank of New York Mellon Corp. will pay $180 million to settle a class-action lawsuit related to its foreign exchange business. The settlement will result in a pre-tax charge of $50 million in the second quarter, the New York-based bank said Thursday in a regulatory filing.

Credit Suisse Ready to Take on Fixing Flows – FX Week (subscription)
As other banks try to shrink away from benchmark orders amid record fines Credit Suisse is keen to attract more benchmark-related flows, saying it is confident its fully segregated, fee-charging model for handling fixing orders – an area where the Swiss bank has traditionally had little presence – satisfies both regulatory and client demand.

Derivatives in Singapore: More Accessible Than Ever Before – The Trade
Singapore Exchange’s derivatives platform celebrates its 30th anniversary this year, having its origin in SIMEX which was Asia’s first international financial futures exchange.

LCH.Clearnet Helping Clearing Houses Avoid a Crash – Financial News (subscription)
Lehman Brothers wasn’t the first bank to fail overnight but when, in 2008, it did, the world’s economy teetered on the brink of collapse. One of the unsung heroes of that harrowing period was clearing house LCH.Clearnet, which was thrust into the heart of the volcano through its role as the middleman in most of the bank’s derivatives trades.

Behavox Uses Big Data to Monitor Rogue Traders – Euromoney
A fintech start-up aims to spot market rigging, using clues in how traders talk, not what they say. Behavox, founded and led by Erkin Adylov, a former Goldman Sachs analyst and GLG fund manager, aims to take this surveillance to a new level with sophisticated behavioural analysis.

FastMatch Introduces Binary Ports as it Speeds Up Platform – FX Week (subscription)
FastMatch is introducing a premium-charge service for order entry and market data connection points in an effort to reduce latency on the trading platform, which will result in tighter spreads and faster price discovery, according to a company note to clients.

Third Time Unlucky as ICE Delays Singapore Futures Market – The Straits Times
Intercontinental Exchange has delayed the start date for its Singapore futures market a third time, another setback for the exchange operator’s expansion into Asia.

 

 

Market Savvy  

IMF Predicts Upturn for Russian Economy After 3.4% Fall This Year  
Financial Times (subscription)

The Russian economy is set to contract by 3.4% this year but will rebound in 2016, posting 0.2% growth, the International Monetary Fund said on Thursday. Ernesto Ramirez Rigo, the head of a two-week IMF mission to Russia, said the fund had revised upward its outlook for Russian economic growth and inflation on the back of improved economic data and the recent strengthening of the rouble.

Dollar Slips After Weak US Data
Wall Street Journal (subscription)
The dollar slipped against the euro Friday after lacklustre US data in the previous session damped investors’ outlook for stronger growth in the second quarter.

 

 

Industry Events