Top Headlines

‘Flash’ Events Hurt Market Liquidity for Days: NY Fed Blog – Reuters
Excessive price moves and reversals in a span of minutes, also known as “flash” events, have hurt liquidity in the stock, bond and currency markets for days, according to a New York Federal Reserve blog released on Tuesday.

US Law Firms Learn to Queue to Sue over FX Rigging in London – Bloomberg
US law firms are queuing up to sue banks in London, the next act in the foreign exchange rigging scandal that saw a $2 billion lawsuit settlement in New York. Scott and Scott, a US-based law firm that has been talking to institutional investors to quantify the potential civil damages, says it is opening a London office to capitalise on potential UK suits that could be filed as early as the fall.

Double Jeopardy for Banks Snared in Foreign Exchange Rigging Scandal – Forbes
Spare a tiny bit of compassion for the employers of the miscreants, which having shelled out billions of dollars in fines, now face class action suits brought by thousands of investors claiming losses from the banks’ foreign exchange misadventures.

FX Technology Bets to Drive Dealer Market Shares – Euromoney
The jury is out on whether the rise of tech-savvy non-banks means FX banks should adopt either a full service, market champion model or a simplified, limited service provider model, or something in between.

Bitcoin Is Having an Identity Crisis – Bloomberg
Bitcoin was built on the sort of open-source ethos that has driven generations of geeks. But the same principles it celebrates – a decentralised network of contributors, a transparent code base – are allowing competitors to flourish. The bitcoin faithful aren’t so sure that’s a good thing.

Carney’s Super Thursday Gets the Thumbs Up from Economists – Bloomberg
Bank of England Governor Mark Carney took quite a risk when he decided to overhaul the central bank’s nearly 20-year-old communication strategy earlier this month. The gamble paid off, at least according economists.


Regulatory News

US Grants ASX First Permanent Clearing Exemption – FOW (subscription)
The US Commodity Futures Trading Commission (CFTC) late on Tuesday, granted Australian clearing house, ASX Clear (Futures), a permanent exemption from registration as a derivatives clearing organisation.

CFTC Eyes Korea Clearing Exemption – FOW (subscription)
The US Commodity Futures Trading Commission (CFTC) on Tuesday called for public comment on an application by Korea Exchange for permanent exemption from registration as a derivatives clearing organisation. Korea Exchange joins OTC Clearing Hong Kong in the final stages of the application process.

CFTC Aims for Swap Auto Affirmation – International Financing Review (subscription)
The US derivatives industry is scrambling to develop a market-wide method for affirming voice-executed swap trades in just minutes, following a behind-the-scenes CFTC ultimatum to come up with a plan or expect a rule to be made.

Uncompetitive Clearing Market Could Trigger ‘Unmanageable’ Risks – Investment & Pensions Europe
Lack of competition within the clearing market could expose pension funds to unmanageable risks and higher than necessary costs, according to PensionsEurope. The European industry group also argued that the European Market Infrastructure Regulation, which currently offers the pensions sector a time-limited exemption from centrally clearing derivatives trades, should be amended to allow the exemption to continue indefinitely.

Basel Committee Releases FAQs on Standardised Approach for Measuring Counterparty Credit Risk Exposures
The Basel Committee on Banking Supervision has received a number of interpretation questions related to the Standardised Approach for measuring counterparty credit risk (SA-CCR), as published in March 2014 (and revised in April 2014). The SA-CCR will replace both current non-internal model approaches, the Current Exposure Method and the Standardised Method.


Company News

CME Futures Draw More Currency Traders than Ever Amid Bank Fines – Bloomberg
CME Group says its foreign exchange futures contracts are attracting more traders than ever as investors seek safety in exchanges after banks paid billions of dollars to settle claims of currency manipulation.

Goldman Sachs’s Unit Obtains Hong Kong Banking Licence – Reuters
The world’s largest investment banks have been setting up new subsidiaries as rules drawn up in the wake of the global financial crisis have forced financial firms to rethink where they book their over-the-counter derivatives transactions.

18 Months In, CME Ventures Has Sharpened Its Focus – Chicago Tribune
Since CME Group launched its startup investment arm CME Ventures 18 months ago, it has refined its investment focus and taken stakes in six companies.

Citigroup to Sell Alternative Investor Unit for $425 Million – Bloomberg
Citigroup agreed to sell its Alternative Investor Services business to SS&C Technologies Holdings, a provider of software and investment services to the finance industry, for about $425 million.


Market Savvy  

Currencies Lose Firepower as Trade Weapon
Financial Times (subscription)
When China’s central bank last week triggered the two biggest single-day falls in the renminbi since the 1990s, plenty of people were keen to proclaim a resumption of the “currency wars” that have been a feature of the global economy since the 2008 financial crisis. But if Beijing’s move prompted a predictable political response from veteran currency warriors in Washington and other capitals, it ignored what many trade economists see as an increasingly well-documented fact – currencies are not the trade weapon they once were.

China’s Devaluation May Be Bad News for FX Industry
China’s currency devaluation should give a shot in the arm to global foreign exchange volumes as traders take advantage of and protect themselves against the surprise surge in volatility, but its longer-term impact on market activity may not be so benign.

Rates to Rise Soon, says Bank of England Policymaker
Interest rates will rise “pretty soon”, Bank of England policymaker Prof David Miles has predicted – as he prepares to leave his role on the committee that takes the decision each month.

US CPI, FOMC Minutes to Offer Fed Timing Hints
LMAX Exchange
It hasn’t been the busiest of weeks, with the combination of a light economic calendar and razor thin August trade playing a major part. Still, there is plenty of risk out there at the moment, with ongoing China uncertainty, a potential resurfacing in Greece troubles and the timing of Fed lift-off all capable of making waves.

Forward Books Compound EM Reserve Fall
Financial Times (subscriptiou)
The foreign exchange reserves cannily squirrelled away by emerging market nations have started to erode this year, as a host of countries have suffered capital outflows or used their treasure chests to help stem falls in their currency.


Press Releases

ADS Securities Adds CFDs to Orex Platform
ADS Securities has taken another step forward in developing its multi-asset technology with the launch of CFDs (contract for difference) on its OREX platform.


Industry Events