Following on from the MAR report in my last blog comes one on a consultation from ESMA concerning the Organised Trading Facility (OTF) Regime. The accompanying paper provides an overview of the functioning of the OTF regime. It discusses the definition of OTF’s, the use of discretion in the execution of orders and the practice concerning the use of matched principal trading.
As we approach Halloween market abuse has come back to haunt the FX market. Our Advent Blog last year covered the ESMA Consultation Paper on the provisions of the Market Abuse Regulation (MAR) and highlighted the fact that spot FX is not covered by MAR.
For some time in the UK the regulators and authorities have tried to introduce true competition to the traditional banks. Much debate has occurred as to the rights and wrongs of allowing a new grouping of Challengers, Neos and FinTech enter the banking market with a lighter regulatory touch to the incumbents.
Given the longstanding focus on the familiar, well-used trading benchmarks and indices currently in use but due to be retired or changed, it’s quite normal to feel that you don't know your SARON from your €STR!
I have been catching up on some light reading in the glorious English sunshine. One report in particular caught my eye; the Bank for International Settlements (BIS) Committee on Payments and Market Infrastructures released a paper in July
The regulation for Uncleared Margin Rules (UMR) was set in motion at the 2009 G20 meeting following the global financial crisis.
A triumvirate of the Working Group on Risk-Free Reference Rates (RFRWG), the FCA and the Bank of England published joint statements in March and April (see my previous blog LIBOR Wars) reiterating that firms must move away from referencing LIBOR and reduce the stock of legacy LIBOR contracts.
The effect of the pandemic has been a mixed bag for many involved in our markets. The increase in volatility has seen a boost to trading activities and RegTech has been busy innovating to help overcome the compliance issues of remote working. With banks splitting personnel between the office, disaster recovery sites and working from home, issues have arisen that will spur technological development and system renewals.
Regulations are having a profound effect on the trading landscape alongside a proliferation of Codes of Conduct. In the UK, there are three codes replacing the former NIPS code covering FX, Money Markets and Precious Metals.
It would have been one thing pondering on how to deal with a misdirection of Cupid’s bow recently on St. Valentine’s Day. But, instead, how do your customers react, when attempting to book a deal on-line, when a quoted price is rejected? It can often lead to confusion and leave a negative feeling if not properly understood as to why it occurred.
We saw during 2019 increased interest in various projects for a Central Bank Digital Currency (CBDC) launch as a recurring theme. CBDC is a digitised sovereign currency, created and issued by, and a liability of, the country’s monetary authority. As such they are viewed as legal tender which is a core difference to cryptocurrencies and stablecoins. Those who made it up the Davos slopes to the World Economic Forum (WEF), were met with ideas and discussions taking place on how CBDC could be a potential solution to multiple challenges, including financial inclusion and efficiencies in the global payment systems.
When it’s time to review systems and processes how do you best go about that? Chat to your peers in similar organisations to identify what they’re using? Search the internet? Employ the services of a consultancy firm to do the research for you? They’re all familiar options widely used, and the outcome of each can actually be quite different.