Category: FX Corporate Treasury

FCA mandates TCA across asset classes starting January 2017

FCA proposals point governance liability directly at global investors. This proposal will be up for consultation until January 4, 2017. Throw in MiFID II best execution requirements drawing closer, firms will have a narrowing window to improve data collection and implement an independent TCA framework. FCA proposes complete transparency on pension scheme transaction costs http://www.investmentweek.co.uk/investment-week/news/2473068/fca-proposes-complete-transparency-for-asset-managers-on-pension-scheme-transaction-costs…

State Street to pay $530 million to resolve forex fraud claims

Custody bank State Street Corp (STT.N) said it has agreed to resolve all pending litigation and regulatory matters in the United States related to its indirect foreign exchange business. State Street said it expects to pay a total $530 million for the settlements, which would be fully covered by a previously established reserve, according to…

Business strategy post-Brexit: GE's Immelt shows the way

Rather than whining about the pending uncertainty post-Brexit, GE’s Jeff Immelt lays out an actionable plan. He has no choice, with significant revenue and operations globally he cannot let the prevailing political sentiment interfere with his quest to deliver value for shareholders. He points to the positive role that businesses play in global political discourse:…

Would you know if front running cost you $8 million? A case for a more effective regulatory mandate.

We are saddened to see another negative example of the OTC FX market splashed across the world’s leading newspapers. These two headlines below aptly demonstrate the strain the institutional currency market is under. The banks likely believe they have the right to cover the open position risk as they see fit, in order to protect…

HSBC forex traders charged with criminal fraud but cleared on an internal HSBC probe

HSBC forex traders charged with criminal fraud http://www.ft.com/cms/s/0/9c44fe7a-4e97-11e6-8172-e39ecd3b86fc.html#axzz4F33H4Ddd The latest legal and regulatory concerns related come from an alleged situation of HSBC’s FX desk front-running a large corporate currency transaction. The profit estimated for the bank, $8 million. HSBC internal probe ‘cleared’ top forex traders http://www.ft.com/cms/s/0/941eb8a8-4f32-11e6-88c5-db83e98a590a.html#axzz4F33H4Ddd The HSBC review, conducted in the wake of a…

Euromoney: Uncertainty stalks GBP trading post-Brexit

FXT views the prevailing condition of high geopolitical uncertainty coupled with declining multi-asset market liquidity and unprecedented interest rate markets (~$12 trillon of developed market government bonds with negative yield) as a dangerous cocktail for FX transaction costs as the US presidential election looms… Full article: http://www.euromoney.com/Article/3568604/FX-Uncertainty-stalks-sterling-sales-and-trading-post-Brexit-vote.html

Mispricing of FX Transactions Costs European Funds Billions

Independent buy-side market think tank, New City Initiative, released a paper today outlining excessive FX execution costs, with conservative estimates totaling 1.5 billion EUR for European asset managers. The paper calls for clear direction from regulators regarding new MiFID II directives, and a strong recommendation for investors and asset managers to use independent foreign exchange…

Can I Achieve Performance Improvement w/ FX TCA?

Franklin Templeton highlights the significant improvement in their international asset portfolios w/ FX TCA and how it fits into their best execution policy. The article demonstrates the need for direct FX expertise to accurately perform FX TCA. Additionally the currency market domain knowledge required to improve FX transaction costs http://www.tradersmagazine.com/news/FX-report-Buyside-looks-to-TCA-to-Improve-FX-Trading-111322-1.html?pg=1

Currency Costs - The Trend Is Not Your Friend

In the financial markets there is a well-known phrase, “the trend is your friend until it ends.” One recent unfriendly trend has foreign exchange markets hoping for a happy ending: Three state pension funds have turned to legal means to address what they believe to be fraudulent FX pricing practices by banks: October 2009. State…