Top Headlines

Regulators Eye Leverage Cap in FX – Euromoney
The convulsions after the SNB’s decision to cease pegging the Swiss franc to the euro are still being felt, with regulators in Europe and Australia debating the merits of tougher controls on leverage in FX markets for retail investors.

Financial Markets Becoming More Fragile, Says Bank of England – Wall Street Journal (subscription)
The Bank of England has joined a growing chorus of regulators and investors warning that global financial markets are becoming more “fragile” and prone to extreme convulsions. Recent trends, such as low trading volumes, “could lead to heightened volatility and undermine financial stability,”according to a statement from Tuesday’s meeting of the Bank’s Financial Policy Committee, which monitors financial market risks.

ECB Shelves Euro Clearinghouse Policy: Source – Reuters
The European Central Bank has quietly shelved its policy of requiring clearinghouses handling euro-denominated securities to be located inside the eurozone, after the measure was rejected by a top European court, a source at the central bank said.

Global Currency Trading Principles Said to Be Ready for Release – Bloomberg
Central banks in the world’s biggest currency markets will publish on Monday principles of behaviour and ethics for foreign exchange trading, according to a person familiar with the document.

Treasury Help Sought in Cross-Border Swaps Dispute – Wall Street Journal (subscription)
A fight threatens clearinghouses like CME and ICE as global regulators work to ensure equivalent rules. Senate Agriculture Committee Chairman Pat Roberts (R., Kansas) is pressing the Obama administration to help resolve a protracted cross-border dispute over the cross-border treatment of clearinghouses.

Wall Street Banks Bask in Warmer Trading Clime – Wall Street Journal (subscription)
The volume of trading in bonds, interest rate products, currencies, and commodities has been sharply higher in the first three months of 2015. This will likely mean improved trading revenues when the big market-making banks report results for the quarter coming to its close in just a few days.

Report: Buy Side Quest for Best Execution Fosters FX TCA – Profit & Loss
Buy-side market participants, such as corporate treasuries, public pension plans and private endowments, are increasingly embracing best execution philosophy for FX, as they begin treating it as a separate asset class and a source of alpha, in addition to actively hedging FX exposure on a regular basis, says Aite Group in a new report.

The Yuan Comes to Europe as LSE Hosts ETF Tracking Chinese Money – Bloomberg
A Chinese bank has launched the first money-market fund denominated in yuan that’s based in Europe, a milestone in the currency’s emergence as a major force in world markets.

Dealer Body Launches Good Behaviour Check for Banks – Reuters
Financial markets body the ACI launched a new online learning portal for dealers on Thursday. Its “Model Code” of dealer conduct is formally recognised by a number of central banks and was included in a joint document agreed by all of the major monetary authorities this month in an effort to unify conduct rules globally.

SNB Warns of ‘Difficult Times’ as Currency Move Hits Home – Financial Times (subscription)
Switzerland is facing “difficult times” and a short period of deflation following January’s abrupt unwinding of a currency peg, one of the Swiss National Bank’s most senior policy makers said on Thursday night.

Euro Falls for Second Day Versus Dollar as Post-Fed Rally Fades – Bloomberg
The euro fell for a second day against the dollar, after climbing to a three-week high on Thursday, amid speculation the US currency’s record rally will continue even after the Federal Reserve cut its outlook for interest rates.

Won Leads Asian Currency Advance This Week on Fed Rate Outlook – Bloomberg
Asian currencies climbed this week, led by South Korea’s won and Malaysia’s ringgit, on speculation the Federal Reserve will raise US interest rates at a slower pace than market participants had envisaged.



Regulatory News

CFTC Clamps Down on “Untenable” Reporting Rules – International Financing Review
The Dodd-Frank goal of a complete picture of swaps activity appears to be light years away. Chief regulator, the CFTC, is clamping down on industry compliance with newly established swaps reporting rules, just as market participants publicly complain to Congressional authorities that rules are too harsh.

Meeting of the Financial Stability Board in Frankfurt on 26 March (press release)
To address misconduct risks, the FSB reviewed a work plan that will examine whether steps are needed to improve standards of conduct in the fixed income, commodities and currency markets.

SEC Proposes Rule to Require Broker Dealers Active in Off-Exchange Market to Become Members of National Securities Association (press release)
The proposed amendments, among other things, would eliminate the current proprietary trading exemption and replace it with a more focused one that would accommodate off-exchange transactions by a floor-based dealer that are solely for the purpose of hedging the risks of its floor-based activities.

Five Things You Need to Know About FCA Approach to Mifid – FT Adviser
The second iteration of the Markets in Financial Instruments Directive (Mifid, subsequently Mifir when it becomes ‘regulation’) passed into EU law last July and must be implemented within member states by January 2017. There is, though, considerable scope for national regulators to interpret or extend the rules. FTAdviser goes over the five key points from the proposals.



Company News

Icap Said to Consider Spinoff of EBS-BrokerTec Electronic Unit – Bloomberg
Icap is considering spinning off EBS-BrokerTec, a move that would separate its electronic trading operations from a lacklustre unit that handles trades over the phone. The idea behind a potential Icap split: electronic trading is the future for securities and derivatives markets as phone-negotiated transactions wane. EBS-BrokerTec could be worth more on its own.

High KRX clearing fees driving won swaps offshore: Bank of Korea – Asia Risk (subscription)
High clearing fees on the Korea Exchange means that won swap dealers with the capacity to do so are conducting their trades via offshore bilateral swaps in order to avoid the onshore clearing mandate, according to a study by the Bank of Korea. Korea introduced mandatory clearing of won swaps of up to 10 years on June 30 last year.

ETX Buys Collapsed Broker Alpari’s Client List in Possible £10 Million Deal – London Evening Standard
Spread-betting firm ETX Capital has snapped up the client list of Alpari UK in a deal which could generate millions for creditors of the stricken broker hit by January’s earthquake in currency markets.



Market Savvy  

Is Russia Back in the Game?
With the ruble surging to new 2015 highs, a better-than-expected earnings report and a brief rally in the price of oil, analysts have been contemplating whether the Russian economy has turned a corner.



Industry Events