Foreign exchange platforms are tightening rules for last-look liquidity providers that let market makers quit trades in a certain time period. The U.K.'s Fair and Effective Markets Review is seeking more information on whether the practice should be allowed in currency trading.
Three banks have agreed to pay the Office of the Comptroller of the Currency nearly $1 billion combined in connection with alleged manipulation of foreign exchange benchmarks. The OCC fines are separate from those imposed by the Commodity Futures Trading Commission, the U.K. Financial Conduct Authority and the Swiss Financial Market Supervisory Authority.
Guan Tao, a top official at the State Administration of Foreign Exchange, says China is considering measures to curb speculative capital flow. "There are a lot of policies that can be considered, including the Tobin tax," Guan said, referring to a levy on financial transactions named after Nobel laureate James Tobin.
The Swiss Financial Market Supervisory Authority says it is examining banks accused of working together to manipulate the foreign exchange market. The regulator says it is "coordinating closely with authorities in other countries as multiple banks around the world are potentially implicated."
Citigroup, Barclays Capital and other banks heavily involved in foreign-exchange trading are enhancing technology as competition in the market heats up. "It's an arms race and the very biggest players are competing very hard," said Kevin Rodgers, Deutsche Bank's global head of FX spot, electronic trading and derivatives. Visit www.gfma.org/fx to learn about the other industry foreign-exchange initiatives from SIFMA's global affiliate.