Major platforms see increases in Feb volumes

All the major FX platforms have now reported their Feb 18 vols, with SpotStream leading the way up 10% to a new all time record of $28.8bn/day, whilst HotSpot also recorded a new all time record of $44.2bn/day.

Reuters Spot FX volumes recorded a 5% increase, although overall Reuters recorded a new record of $463bn/day driven by increased flows through their MiFID compliant MTF platform for Fwds, Swaps and NDFs.

Leading FX platforms ADV for Feb 18

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Major platforms deliver strong Jan volumes

All the major FX platforms I track reported strong Jan 18 vols, lead by EBS up a whopping 58% to $93.2bn/day (up from $65.5bn/day in Dec). Both Hotspot (now owned by CBOE) and SpotStream hitting new all time high volumes.

Leading FX platforms ADV for Jan 18

Looking at the Year on Year (YoY) trends, we see that Hotspot and SpotStream have delivered the strongest performances, up 37% and 39% respectively, as can be seen in the chart below. Continue reading

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Results of Oct 17 Semi Annual FX Surveys

Latest semi-annual FX survey data from top central banks (FX Joint Standing Committees) show that in Oct 17 FX average daily vols (ADVs) for the top six FX centres was $4.28tn/day, an drop of –6.2% from Apr 17, although up +3.4% year on year from Oct 16.


Top six global FX trading centres Oct 17
(central bank semi-annual FX survey)

London remains top trading centre, with 54% share of top 6 ADV at $2.23tn/day in Oct 17

% share of top six FX centres (central bank semi-annual FX survey date)

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Global FX code ‘Last-Look’ (Principal 17) updated.

As mentioned previously, The Global Foreign Exchange Committee (GFXC), has updated their guidance around ‘trading in the last-look window’ – Principal 17 of the Global Code of Conduct, as a result of market feedback.

Global Foreign Exchange Committee (GFXC), GLobal Code of Conduct

The previous version of the code included the phrase is likely inconsistent’ as shown below:

 During the last look window, trading activity that utilises the information from the Client’s trade request, including any related hedging activity, is likely inconsistent with good market practice because it may signal to other Market Participants the Client’s trading intent, skewing market prices against the Client, which (1) is not likely to benefit the Client, and (2) in the event that the Market Participant rejects the Client’s request to trade, constitutes use of Confidential Information in a manner not specified by the Client.

The revised code (here) replaces that with much stronger wording, clearly stating Continue reading

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Credit Suisse fined $135m for FX abuse

The New York State Department of Financial Services (DFS), has fined Credit Suisse $135m for ‘Unsafe, Unsound and Improper Conduct’.

The transcript of the order makes for depressing reading, when we see the extent of the improper conduct and abuse of information that went on. However it does show that the regulators are getting better at joining the dots and pull together a compelling case which sends another strong message to the market. Moving forward I am therefore encouraged that with the global code of conduct, increased monitoring and surveillance, the senior managers regime with risk of huge fines and imprisonment that we are likely to see less abuse of this type in the FX markets, at least at the business wide level.

The consent order published this week states that:

Between 2008 to 2015, Credit Suisse consistently engaged in improper, unsafe, and unsound conduct, in violation of New York laws and regulations, by failing to implement effective controls over its FX business.

Although Credit Suisse internal policies state that:

“Confidential or Proprietary Information: Employees should assume that all information about customer orders and transactions is confidential and or proprietary.”

and

“Employees are prohibited from front-running (trading ahead of customer or Firm transactions).”

Nonetheless, the order includes the following improper conduct: Continue reading

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GFXC to change Principal 17 (Trading in last-look window) after market feedback

In last week’s post, we looked at the feedback received from the market by the Global Foreign Exchange Committee (GFXC) to Principal 17 of the FX Global Code of Conduct, which discusses ‘trading in the last-look window’.

In light of the feedback, the GFXC has today issued a press release stating:

GFXC has concluded that Principle 17 should indicate that market participants should not undertake trading activity that utilises the information from the client’s trade request during the last look window.

At the same time, the GFXC also agreed that Principle 17 should clarify the conditions under which certain trading arrangements, often referred to as “cover and deal”, may be distinguished from the last look guidance.

The release went on further to state that: Continue reading

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Major FX platforms report weak Oct volumes

All the major FX platforms I track reported weak Oct volumes, with EBS leading the way down -17% drop in ADV to $80.6bn/day ($97.4bn/day in Sept).

Leading FX platforms ADV for Oct 17

The drops come after strong Sept figures, but still leaves most platforms with small increases on the year as shown in the chart below, with the exception of EBS which shows -14% fall YTD in ADV. Continue reading

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