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And Finally... Just about 10 months ago the deal was announced to sell Icap’s voice business to Tullett Prebon and at that time, in this column, I suggested that a consequence of that deal would be an easier path for anyone looking to buy Icap’s electronic business, subsequently revealed to be named Nex. Obviously I cited an exchange as the most likely buyer and it seems, if the headlines of last week are anything to go by, that the pieces are being moved into place. Moving pieces is, however, very different to an actual deal – what are the chances of that?
And Another Thing... We all know there has been a significant shift in recent years in FX markets towards the machine - events, especially in the legal and regulatory space, have helped drive the change - but is this shift now reaching a tipping point whereby traditional finance and economic theory is challenged? We talk a lot about the equitisation of the foreign exchange market structure but is the real issue, thanks to the growth in automated market making, the equitisation of FX market behaviour?
And Finally... That we are still debating the positive or negative impact of non-bank market makers on the FX market doesn’t surprise me – what does is the simplistic level of debate over what I consider to be a fairly complex issue. Yes the big prime brokers could shut these firms down with a hefty rise in prime brokerage fees or a withdrawal of credit totally - that would send most of them back to where they first emerged – the cleared world with its very limited spot foreign exchange market opportunities.
And Finally... Suggesting that FX liquidity takers pay to access precious foreign exchange liquidity was just the hot topic predicted if the level of correspondence was anything to go by, and while the consensus seemed to be, from the anecdotal evidence, that most people prefer the "both parties pay" model, this raises issues for me. Inevitably last look has a role to play, as pointed out by several correspondents, and if last look is used then yes, the LP should pay for the free option
And Another Thing... Changing the habits of a lifetime is a very difficult proposition in the foreign exchange industry, but is now a prudent time for some platform providers to have what will no doubt be some very difficult conversations with their liquidity consumers about actually paying for it? FX liquidity is a more valuable commodity than ever and LPs continue to look at where they stream, what the value from that venue is, and how they can, if at all, warehouse the risk profitably.
And Finally... The unexpected departure of ACI - The Financial Markets Association president Marshall Bailey has come at an inopportune time for the association, and more than ever the association needs to demonstrate to its members and the relevant authorities that it has a continuity programme in place
And Another Thing... I have a lot of respect for the Federal Reserve and the people that work there, but I have to ask: is it just another example of a dysfunctional regulatory framework?
And Finally... Thursday marks an important day for financial markets with a fragmented regulatory regime about to come into force, and NDF and FX options markets are right in the firing line. Will the already fragile liquidity picture in these markets worsen?
And Another Thing... This column two weeks ago on benchmark fixings prompted quite a response – to the degree that I feel it is necessary to go into it a bit further and ask the question, “Can there be a justification for offering mid-rate ...
And Finally... This should be the time to tiptoe (very gently) back into the murky twilight that exists between the legal/regulatory profession and markets, but as this column rarely believes in doing anything gently, we’ll just pile right in. Are ...