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Banks Face Reduced Claims in FX Rigging Case Seven banks have had a number of claims against them for FX market manipulation dismissed in an ongoing US civil litigation court case. The Bank of Tokyo-Mitsubishi UFJ, Credit Suisse, Deutsche Bank, Morgan Stanley, RBC Capital Markets, Société Générale, and Standard Chartered Bank (collectively, the Non-Settling Defendants or NSDs) are the seven banks named in the court documents released yesterday. The NSDs are accused of conspiring to fix FX prices around the 4pm WMR benchmark, but moved to dismiss the claims against them.
VTB Group Fines by CFTC for Fictitious Trades The US Commodity Futures Trading Commission (CFTC) has levied a $5 million fine against Russia’s JSC VTB Bank and its subsidiary VTB Capital for executing fictitious and non-competitive block trades in Russian ruble futures contracts, which were cleared through the Chicago Mercantile Exchange. VTB Capital, a U.K.-incorporated bank, is 94% owned by a holding company that, in turn, is 100% owned by VTB. The Order finds that between December 2010 and June 2013, VTB and VTB Capital executed over 100 block trades in RUB/USD futures contracts on CME, with a notional value of approximately $36 billion. s.
FXPA Expands with HC Technologies Membership HC Technologies has joined the Foreign Exchange Professionals Association (FXPA) as a supporting member of the FX trade group. “HC Technologies is pleased to support the FXPA in its efforts to promote discussion between regulators and market participants in the ever-changing global FX environment,” says Joe Niciforo, managing partner of HC Technologies. The addition of HC Technologies brings the FXPA’s membership up to 24 firms, after Jump Trading joined the group as a governing council member earlier this month. “FXPA’s aim is to represent the breadth of the industry’s views to those in legislative and regulatory policymaking roles in an effort to educate and support those with oversight of our markets. Being a consensus-driven organisation enables members to come together on a variety of essential topics to produce views that represent a market with many variables. We are pleased to welcome HC Technologies into the growing number of firms that are lending their voice to the work that FXPA is doing,” says an FXPA spokesperson.
Last Look in the Spotlight for ACI’s Model Code The eternally tricky subject of last look is being reviewed by the Committee for Professionalism (CFP) at ACI – The Financial Markets Association with a view to a potential re-write of guidelines published in ACI’s Model Code. Sources familiar with the matter have told Profit & Loss that the CFP has been canvassing opinion over the appropriate use of last look in FX markets, which continues to split opinion in the industry with the aim of providing a more detailed set of guidelines.
Regulatory Hurdle Removed for Tullett-Icap Deal The UK’s Competition and Markets Authority (CMA) has indicated that it is satisfied with the altered terms of the proposed merger between Tullett Prebon and Icap, and will not refer the deal for an in-depth investigation. Profit & Loss reported in June that the two brokerages offered to change the terms of the proposed acquisition of Icap’s global wholesale broking and information business (IGBB) by Tullett in order to avoid an in-depth investigation by the CMA. Under the terms of the new proposal, Icap and Tullett agreed to sell Icap’s London-based oil desks – with key staff – that are responsible for providing broking services to customers based in EMEA to an up-front buyer approved by the CMA.
CFTC Approves System Safeguards, Japanese Swaps Rules The US Commodity Futures Trading Commission (CFTC) has approved two final rules for system safeguards testing requirements, as well as a comparability determination for Japan’s margin requirements for uncleared swaps. By a unanimous vote, CFTC Commissioners approved final rules for system safeguards testing requirements for designated contract markets, swap execution facilities, swap data repositories, and derivatives clearing organisations. “Cybersecurity is a top concern for American companies, especially financial firms. These rules are a good step forward in addressing these concerns,” said Commissioner Sharon Bowen in a statement today.
FSB Publishes Update on Misconduct Reform The Financial Stability Board (FSB) has published its second report on progress in its workplan of Measures to reduce misconduct risk that it agreed in May 2015. The board says that ethical conduct, and compliance with both the letter and spirit of applicable laws and regulations, is “critical” to public trust and confidence in the financial system. It adds that misconduct is also relevant to prudential oversight as it can potentially affect the safety and soundness of a particular financial institution.
ISDA Live with SIMM The International Swaps and Derivatives Association (ISDA) last week announced the live launch of the ISDA Standard Initial Margin Model (SIMM), an industry standard methodology that it says is being widely adopted by market participants to calculate initial margin for non-cleared derivatives trades. The launch comes as the US granted a last minute reprieve from the non-cleared margin rules in the face of opposition from market participants and announcements from four major centres that they were delaying enforcement of the rules
CFTC Issues Last Minute Reprieve on Margin Rules Responding to industry concerns it was not ready for the CFTC's margin on uncleared swaps rule, the Commission has granted a stay of execution
Giancarlo Slams Regulators as US Implements Margin Rules New margin rules for uncleared swaps come into force in the US, Canada and Japan today, and CFTC commissioner Christopher Giancarlo is, for one, very unhappy about it.