Posted on October 7, 2015 by Paul Blank
Interesting to see the announcement from EBSBrokerTec, that they are buying Molten Markets, the three-year old FX technology platform for asset managers and pension funds.
According to the PR, the acquisition of Molten Markets will enable EBS BrokerTec to provide asset managers with a sophisticated execution management system and innovative trade cost analysis. Leveraging Molten Markets’ assets and technology, as well as EBS BrokerTec’s extensive distribution network and liquidity provider (LP) relationships, will enable EBS BrokerTec to offer a unique range of solutions to the asset management industry, while at the same time enhancing its offering to its LP customers.
Molten Markets current product suite include: Continue reading
Filed under: FX, OTC, Paul Blank, Survey Results | Leave a comment »
Posted on September 9, 2015 by Paul Blank
Interesting to see EBS BrokerTec, adding an FX Options capability to their relationship based liquidity solution EBSDirect, through a licensing agreement with FX Bridge Technologies.
The agreement will allow EBS to develop an FX Options capability to round out the OTC coverage for the platform, providing relationship based disclosed FX liquidity across spot, Fwds, Swaps, NDFs and FX Options.
As part of the agreement, Continue reading
Filed under: FX, OTC, Paul Blank, Regulation | Leave a comment »
Posted on February 4, 2015 by Paul Blank
Back in October 14, European Securities and Markets Authority (ESMA) published a consultation paper on the mandatory clearing of swaps and Non-Deliverable Forwards (NDFs). At the time it was thought the publication was significant, coming a week before the Global Markets Advisory Committee (GMAC) of the CFTC, was to hold a public meeting to discuss whether a clearing mandate is appropriate for NDF’s, with a particular focus on how such a mandate would impact foreign exchange contracts. It was felt that the timing could signify a convergence between Europe and US on NDF clearing mandates.
However, on the basis of feedback received to ten key questions, ESMA has decided to not propose a clearing obligation on the NDF classes at this stage. ESMA believes that more time is needed to appropriately address the main concerns raised during the consultation, although there is still a possibility to propose a clearing obligation at a later point in time in order to take into account further market developments.
Below is a summary of the questions and some of the key responses from the report:
1) Clearing Obligation procedure
2) Structure of the NDF classes: Participants felt that the definition of what constitutes an NDF (currency pair, settlement currency, settlement type and maturity) was not broad enough, and that the criteria should also consider the documentation under which the contract was concluded. Specifically it was felt that only contracts which are traded under non-modified EMTA templates should be subject to the clearing obligation. This would ensure that only standardised classes were considered for clearing.
3) NDF classes proposed for the clearing obligation: Reservations towards mandatory clearing for NDF (or at least mandatory clearing under the proposed time frame) for two main reasons: a) The clearing offer for this asset class is still in its infancy and b) Lack of international convergence
4) Maximum maturity of the NDF contracts
5) Criteria for the determination of the dates
6) Categories of counterparties
7) Dates of application of the clearing obligation
8) Frontloading and the minimum remaining maturity
9) Other comments
10) Cost Benefit Analysis
Full consultation feedback Statement paper here
Filed under: CCP, OTC, Paul Blank, Regulation | Leave a comment »
Posted on October 6, 2014 by Paul Blank
The Bank of International Settlements (BIS) has released an interesting research paper which looks at the incentives for various market participants to centrally clear bilateral OTC derivative trades.
Following the financial crisis, G20 leaders agreed that standardised over-the-counter (OTC) derivatives contracts were to be cleared through central counterparties (CCPs). A number of regulatory reforms have been introduced that affect the incentives for central clearing of these contracts. These reforms include requirements to exchange initial and variation margin for non-centrally cleared derivatives exposures, standards relating to the measurement of counterparty credit risk for derivatives contracts, and capital requirements for bank exposures to CCPs.
The paper found that:
Clearing member banks (ie those institutions that clear directly with CCPs) have incentives to clear centrally.
Whilst central clearing incentives for market participants that clear indirectly (ie that are not directly clearing members of a CCP but clear through an intermediary that is a clearing member of a CCP) are less obvious and could not be comprehensively analysed on the basis of the data received in the quantitative analysis.
However, given that clearing members account for the bulk of derivatives trading, the conclusion of the analysis – there are incentives for them to clear centrally – indicates that the G20 objective on OTC derivatives reforms has, for the most part, been achieved.
Filed under: CCP, Dodd Frank, OTC, Paul Blank, SEF, Web trading technology | Leave a comment »
Posted on March 3, 2014 by Paul Blank
Last week I attended the Association for Financial Markets in Europe (AFME) 9th annual European Market Liquidity Conference.
As always with AFME, there had some thoughtful speakers and topical panel discussions, as well as providing good forum for networking opportunities (including providing for the conference iPad’s pre-loaded with delegate names allowing you to reach out to them and make contact).
This year’s agenda focused on the new emerging market structures
- Liquidity in the new regulated market – the changing market structure
- Keynote address -Verena Ross, Exec Dir, ESMA
- Foreign Exchange:
The renminbi and other Asian currencies
Impact of regulation on development of the FX market place
- Fixed Income:
Development of exchange capabilities
Liquidity issue, what liquidity issue?
- Funding European economic growth: the obstacles and opportunities
Below are my notes and some comments from the sessions that I attended: Continue reading
Filed under: CCP, Dodd Frank, FX, OTC, OTF, Paul Blank, Regulation, SEF, SWAPS | Leave a comment »
Posted on February 21, 2014 by Paul Blank
This week saw the introduction of mandatory execution on new SEF platforms for certain standardised interest rate swaps. Such swaps will no longer be executed bilaterally between banks and their clients, but rather must be executed anonymously on SEFs.
The move to SEF trading has however been tentative, with many buy-side firms holding back, nonetheless by midweek some 74% of the 372 IRS trades were being executed on SEFs, according to data from Clarus. Although there are 23 newly registered SEFs , the majority of business so far has tended to flow through to the incumbent inter-dealer platform SEFs.
But what about single-dealer platforms (SDP), how are banks managing the migration to SEF trading? Continue reading
Filed under: CEP, CFTC, Dodd Frank, OTC, Paul Blank, Regulation, SEF, SWAPS | 1 Comment »
Posted on February 7, 2014 by Paul Blank
The three main OTC FX platforms have now reported their Jan 2014 volumes.
All three platforms delivered strong double-digit pct gains in volumes, with FXAll recording it’s highest single day trading volumes. The individual platforms results were as follows: Continue reading
Filed under: FX, OTC, Paul Blank | 3 Comments »