SFO to Interview FX Traders Under Caution

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SFO to Interview FX Traders Under Caution – Financal Times (subscription)
UK investigators are preparing to interview suspects under caution as part of their criminal inquiries into whether the foreign exchange market was rigged. Former traders, including Citigroup’s ex-European head of spot trading Rohan Ramchandani, who was a member of a chatroom known as the Cartel, will be questioned by the Serious Fraud Office within the next 12 weeks.

Retail FX “Should Occur on Regulated Exchanges”: CFTC’s Bowen – Profit & Loss (free story)
Sharon Bowen, commissioner of the US Commodity Futures Trading Commission, has restated her belief that the retail FX market should be subject to higher regulation, and has suggested that it be moved from over-the-counter markets to exchange traded facilities.

Early Settlement in Rand-Rigging Probe Seen by Ex-Regulator – Bloomberg
South African antitrust authorities will probably reach a settlement with some of the world’s biggest banks accused of rigging trading in the rand, according to David Lewis, former head of the Competition Tribunal.

Winners and Losers Emerge from Fragmented FX Swap Rules – Euromoney
Inertia around the mandating of FX activity on swap execution facilities by the Commodity Futures Trading Commission continues to favour Europe as a trading location.

Wall Street Could Save Billions on Swaps as Regulators Squabble – Bloomberg
A quarrel among regulators could add up to billions in savings for Wall Street banks. At stake is a proposed rule that has dragged on for years that could require firms like JP Morgan and Morgan Stanley to set aside tens of billions of dollars in collateral when trading swaps with their own affiliates. Now, a last-ditch effort by bank lobbyists has helped spur some regulators to second-guess how strict they should be.

Winds of Change Blow Through FX Risk Management – Euromoney
Market volatility has impacted FX risk management processes, although differing approaches to technology investment means the effect on market participants has been uneven.

Global Data Harmonisation of Derivatives Reporting Gains Ground – FTSE Global Markets
The call for regulators to look at data accuracy and integrity comes at a welcome time. It coincides with one of the founding principles of BCBS-239, which asks banks to measure and monitor accuracy of data. But while looking for accurate data is all well and good, alone it isn’t sufficient. The quality of data must be actively managed.

 

Regulatory News

US Futures Regulator in Call to Tackle Industry ‘Culture Problem’ – Financial Times (subscription)
A senior US regulator has advocated taking a page from the UK and passing a new rule tightening governance of derivatives marketplaces to cure what she called a “culture problem” pervading finance.

MAS Reprimands SGX for Outages – Profit & Loss (free story)
The Monetary Authority of Singapore has reprimanded the Singapore Exchange for two outages suffered by the exchange on November 5 and December 3, 2014.

Faull Out from Markets in EC Leadership Reshuffle – Financial News (subscription)
The European Commission has promoted Olivier Guersent to lead its efforts on financial market reform, as part of a widespread reshuffle of its senior management that comes into effect in September. Jonathan Faull, one of the longest serving British officials in the commission will lead a newly created task force on “strategic issues related to the UK referendum”.

 

Company News

Bats Outlines Migration Plan for New Hotspot Data Centres – Profit & Loss (free story)
Bats Global Markets has announced that Hotspot’s London matching engine will go live in the LD4 data centre on September 14, 2015 and its New York matching engine, which is moving from Jersey to NY4 and NY5, will go live November 9, 2015.

Commerzbank Receives Licence to Trade China Onshore FX Options – The Asset (subscription)
Commerzbank Corporates & Markets has received its licence from the State Administration of Foreign Exchange (SAFE) to trade onshore foreign exchange options in China.

Service Aims to Cut Banks’ Swaps Data Costs – Financial Times (subscription)
Three of the world’s 10 largest investment banks have signed up to a new data service that promises to halve the cost of compiling data on some of their international swap agreements. The new service – a joint effort from business advisory firm Deloitte and information intelligence specialist Recommind — comes as banks explore new ways to cut the cost of meeting regulators’ ever increasing demands for data.

Blockchain Start-up Joins Fray to Overhaul Bank Trading Systems – Bloomberg
A start-up run by former Google and Nasdaq OMX Group employees is jumping into the competition to use digital currency technology to tackle financial companies’ slow, antiquated back-office operations. Blockstack, a San Francisco-based firm, has taken the underlying technology behind bitcoin transactions and adapted it for mainstream finance, including clearing and settlement.

 

Market Savvy  

Swiss Central Bank Braced for Ructions if Greece Exits Euro  
Reuters
The Swiss National Bank anticipates considerable market turbulence if Greece quits the euro bloc and would fight a rush to buy already overvalued Swiss francs, the central bank’s chairman said on Thursday. Greece’s failure to reach a deal with creditors would likely intensify flows into the Swiss currency and spur more action by the SNB, which has sought to weaken the franc via negative benchmark interest rates and a charge on franc deposits.

Greek Drama Poses Long-Term Risk for Euro
Financial Times
Jokes about the eurozone were all the rage four years ago, at the height of the debt crisis (“A Greek, an Irishman and a Portuguese go into a bar and order a drink. Who picks up the bill? A German”). Black humour has been less in evidence over this year’s Greek saga. Is it because the consequences of default and Greece’s exit from the euro are deadly serious, or because the market is confident that the prospect of eurozone contagion will be limited?

Goldman Target for Dollar’s Rise: 20%
Wall Street Journal
How much further does the dollar’s bull run have left to rage? Well, Goldman Sachs is targeting a generous 20% climb against the euro by the end of 2017.

UK Would Have Fared Better Inside the Eurozone
Financial Times
Even if euro membership for the UK is not on the agenda in the referendum on UK membership of the EU, it is important to revisit the case. There is a good case to make that Britain would have fared better in the crisis inside the single currency than it did outside.

 

Press Releases

ICE Clear Singapore Announces First Three Clearing Members
Intercontinental Exchange says KGI Ong Capital, Phillip Futures and UOB Bullion and Futures have been approved as the first three clearing members for ICE Clear Singapore. ICE Futures Singapore and ICE Clear Singapore have received regulatory approvals from the Monetary Authority of Singapore.

Over 1,000 Banks Across The World Use RMB For Payments With China And Hong Kong – Swift’s RMB Tracker
Recent Swift data shows that the growth in RMB payments is supported by an increasing number of banks. In May 2015, 1,081 financial institutions used the RMB for payments with China and Hong Kong, representing 35% of all institutions exchanging payments with the latter across all currencies.

 

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