FX Knowledge Hub

10 Billion Reasons to Perform FX TCA in 2018
Think the FX Global Code prevents banks from front running your currency trades? Not so fast says Vanguard’s Andy Maack: FX Abuses Persist Even After $10 Billion in Fines, Traders Say
FCA: TCA ‘Unlikely’ To Fall Under Research / Market Participants Call For More TCA Disclosures
“The payment of third-party transaction cost analysis services is likely to be shouldered by asset managers, rather than passed on to clients, because the UK’s Financial Conduct Authority says such fees are unlikely to qualify as research costs…”   https://www.fxweek.com/foreign-exchange/trading/3451061/fca-tca-unlikely-to-fall-under-research (March 6, 2018) “Transaction cost analysis (TCA) Market participants are calling for more disclosure around who…
FX Transparency comes to Australia: expect a shake-up
The global foreign exchange monitoring and consulting company which represents asset owners and managers, FX Transparency, has appointed a representative for Asia Pacific, based in Melbourne. The firm delves into the opaque world of FX, which, for big Australian investors at least, is both huge and not-well understood. click here for full article: FX Transparency…
Citadel, Vanguard Call for End to Controversial FX Last Look
More momentum to end a deceptive market practice that does not add any value or liquidity in today’s FX market. Interesting also that shortly after this news hit the wires, Thomson Reuters signs a statement of commitment to the Global FX Code of Conduct (the Global Code), formally pledging adherence to the Code’s standards to…
FX fraud conviction damages trust further… Concerns about liquidity impact
Market headlines in recent days will influence the evolving OTC FX market structure.  The judgement against “pre-hedging” activities will have serious risk consequences for market makers and the prices clients ultimately receive.  Market sentiment is biased negatively for liquidity with continued focus on independent oversight via FX TCA. One positive ancillary benefit should be greater market…
Why US firms Must Pay Close Attention Ahead of MiFID II Implementation
Article highlights from author and MiFID II Lead at Meritsoft, Daniel Carpenter. “…CFTC Commissioner Sharon Bowen strongly endorsed U.S. adoption of MiFID II rules, American financial institutions are beginning to slowly realize that a paradigm shift is coming to the trading world in the way of investor protection. The days of ‘soft dollaring,’ the practice that…
State Street fined $35 mln by SEC for hidden markups
Currenex and FX Connect Parent Company Fined $35m by the US SEC State Street has agreed to settle with the US financial watchdog over its fraudulent actions. “The SEC order finds that State Street’s scheme to overcharge transition management customers generated approximately $20 million in improper revenue for the firm.  According to the announcement, State…
New FX Global Code deserves the attention of plan fiduciaries
The new FX Global Code of Conduct has become an area of great interest amongst institutional investors.  The recent Pensions and Investments article by George Gerstein, counsel at Stradley Ronon Stevens & Young LLP, answers two important questions for Asset Owners: Why be aware of it? Why comply? Mr. Gerstein highlights principle 25, “…having an effective…
P&I: More info, but no teeth in new foreign exchange code
Later this month, money managers, pension funds, brokers, banks and other participants in the foreign-exchange market will be asked to sign off on an FX Global Code of Conduct that industry sources said will result in more information to assess execution quality and trading cost. However, more information won’t necessarily translate into better execution or…
Regulatory Exposure: Gauntlet for FX TCA has been thrown
The quest for financial market transparency continues, link below. Regulatory authorities globally, led by Europe (ESMA) & UK (FCA), have mandated oversight on transaction costs as a core requirement for all fiduciaries in a proper best execution framework. The mandate is cross asset class, inclusive of Over The Counter foreign exchange market trades. Is your…