Conclusions from the Profit & Loss Conference in Singapore

Last week I attended the Profit & Loss Conference in Singapore. No matter how frequent my visits, there always are new buildings in the downtown area. The latest BIS survey shows that Singapore has grown to be the fourth biggest FX trading centre globally and my guess is it will become even bigger.

The agenda had a few sessions on the forthcoming regulation changes in the US & Europe, so no surprise there. The keynote address on the first day from the Chairman of the Singapore FX Market Committee was interesting, not least because of his comment that whilst aware of the changes happening elsewhere, the local authorities would ensure that any regulatory changes here would be for the benefit of Singapore as a financial centre. I wonder whether this implies that the goals of Dodd Frank & MiFID II will be muted when applied to the local markets, in spite of the original G20 recommendations.

Also had a pleasant time discussing the role of social media in FX with Jon Vollemaere. I think “growing” is the verb to use.

The address by Michael Nelson from the NY Fed was very good. He spoke plainly of the regulator’s desire to have oversight across all asset classes – potentially including all FX trading activity. This stance fits with the way the MiFID II is drafted in that it covers all asset classes.

In a previous blog (here), my colleague Paul looked at the lobbying by the global FX trade bodies to the SEC to have FX exempted from the Dodd Frank legislation.

The key question for me is this: is the implication that all OTC trading will be moved to some form of lit venue such as an exchange? This implies a major structural change for these markets, not to mention the enormous costs for all participants, both buy-side and sell-side.

Any ideas?

One Response

  1. […] This post was mentioned on Twitter by Caplin Systems, Mike Hill. Mike Hill said: RT @CaplinSystems: Conclusions from Profit & Loss Conference in Singapore: #finreg #DerivReform – by Scott McLeod […]

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