FXPA highlights risks of uneven oversight in global currency markets.
It calls for regulatory parity to ensure fair competition and protect FX integrity.
The Foreign
Exchange Professionals Association (FXPA) has released a white paper urging
policymakers to address regulatory disparities between regulated and
unregulated foreign exchange (FX) derivatives trading venues. The industry
group warns that the current landscape may pose risks to market integrity and
customer protection.
FXPA Calls for Regulatory
Parity in FX Derivatives Trading Venues
In
its report, the FXPA emphasizes the growing presence of unregulated FX
derivatives trading platforms competing directly with their regulated
counterparts. These unregulated venues often operate with minimal oversight,
potentially offering benefits such as higher leverage and lower fees, but at
the cost of reduced customer safeguards.
“The
longer regulatory gaps between regulated FX derivatives trading venues and
unregulated FX derivatives trading venues can be exploited, the more other FX
trading venues will seek to replicate their success,” the FXPA stated in
its white paper.
The
association highlights several key differences between regulated and
unregulated platforms. Regulated venues face higher operational costs due to
compliance requirements, including market surveillance, reporting, and investor
protection measures. They also adhere to strict rules on transparency,
conflicts of interest, and impartial access.
“The
presence of unregulated FX derivatives trading venues also introduces the
possibility of regulatory arbitrage for FX markets. These dynamics raise
concerns about fairness and market integrity around the operation of
unregulated FX derivatives trading venues,” the paper further states.
FXPA suggests
that unregulated venues may benefit from cost savings associated with
non-compliance, allowing them to offer more attractive terms to customers. This
dynamic could potentially impact market liquidity and price discovery.
The Association
calls on global regulatory bodies to evaluate the effects of unregulated FX
derivatives trading venues providing services that are typically subject to
oversight. The group recommends considering these platforms as comparable to
their regulated counterparts, regardless of how they present themselves to the
market.
“Policymakers
should take into account how the operational structures of unregulated FX
derivatives trading venues impact systemic risk management, market development,
and global competitiveness,” the white paper advises.
The
association also suggests that regulators could support regulated entities by
reducing regulatory cost burdens through normalizing standards across
jurisdictions and allowing greater equivalence for entities operating in
multiple markets.
Surge in Forex OTC Derivatives
The OTC
derivatives market saw significant expansion in 2023, with total outstanding
contracts reaching $667 trillion, an 8% increase from the previous year.
Interest rate derivatives, which grew to $530 trillion, and foreign exchange
derivatives, which rose to $118 trillion, were the main drivers of this growth.
The Bank
for International Settlements (BIS) reported a distinctive pattern in market
activity throughout the year. Notional amounts surged by 15% in the first six
months, followed by a 6% contraction in the latter half. This fluctuation
aligns with a recurring seasonal trend observed in recent years.
Despite the
overall growth in notional value, the gross market value of OTC derivatives
fell by 13% in 2023. This decline was primarily due to changes in interest rate
derivatives, which peaked in late 2022 amid rapid interest rate hikes. As
rate increases moderated in 2023, the market value of these derivatives
subsequently decreased.
The Foreign
Exchange Professionals Association (FXPA) has released a white paper urging
policymakers to address regulatory disparities between regulated and
unregulated foreign exchange (FX) derivatives trading venues. The industry
group warns that the current landscape may pose risks to market integrity and
customer protection.
FXPA Calls for Regulatory
Parity in FX Derivatives Trading Venues
In
its report, the FXPA emphasizes the growing presence of unregulated FX
derivatives trading platforms competing directly with their regulated
counterparts. These unregulated venues often operate with minimal oversight,
potentially offering benefits such as higher leverage and lower fees, but at
the cost of reduced customer safeguards.
“The
longer regulatory gaps between regulated FX derivatives trading venues and
unregulated FX derivatives trading venues can be exploited, the more other FX
trading venues will seek to replicate their success,” the FXPA stated in
its white paper.
The
association highlights several key differences between regulated and
unregulated platforms. Regulated venues face higher operational costs due to
compliance requirements, including market surveillance, reporting, and investor
protection measures. They also adhere to strict rules on transparency,
conflicts of interest, and impartial access.
“The
presence of unregulated FX derivatives trading venues also introduces the
possibility of regulatory arbitrage for FX markets. These dynamics raise
concerns about fairness and market integrity around the operation of
unregulated FX derivatives trading venues,” the paper further states.
FXPA suggests
that unregulated venues may benefit from cost savings associated with
non-compliance, allowing them to offer more attractive terms to customers. This
dynamic could potentially impact market liquidity and price discovery.
The Association
calls on global regulatory bodies to evaluate the effects of unregulated FX
derivatives trading venues providing services that are typically subject to
oversight. The group recommends considering these platforms as comparable to
their regulated counterparts, regardless of how they present themselves to the
market.
“Policymakers
should take into account how the operational structures of unregulated FX
derivatives trading venues impact systemic risk management, market development,
and global competitiveness,” the white paper advises.
The
association also suggests that regulators could support regulated entities by
reducing regulatory cost burdens through normalizing standards across
jurisdictions and allowing greater equivalence for entities operating in
multiple markets.
Surge in Forex OTC Derivatives
The OTC
derivatives market saw significant expansion in 2023, with total outstanding
contracts reaching $667 trillion, an 8% increase from the previous year.
Interest rate derivatives, which grew to $530 trillion, and foreign exchange
derivatives, which rose to $118 trillion, were the main drivers of this growth.
The Bank
for International Settlements (BIS) reported a distinctive pattern in market
activity throughout the year. Notional amounts surged by 15% in the first six
months, followed by a 6% contraction in the latter half. This fluctuation
aligns with a recurring seasonal trend observed in recent years.
Despite the
overall growth in notional value, the gross market value of OTC derivatives
fell by 13% in 2023. This decline was primarily due to changes in interest rate
derivatives, which peaked in late 2022 amid rapid interest rate hikes. As
rate increases moderated in 2023, the market value of these derivatives
subsequently decreased.
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
Wall Street Gets 24/7 Access to European Markets as Eurex Welcomes US Brokers
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
#fmps #fmps24 #fmevents #RetailTrading #FintechInnovation #FinancialRegulation #DigitalAssets #GlobalFinance
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
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As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
#fmps #fmps24 #fmevents #RetailTrading #FintechInnovation #FinancialRegulation #DigitalAssets #GlobalFinance
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
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Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
#fmps #fmps24 #fmevents #ATFXConnect #APACFinance #InstitutionalTrading #FinancialTechnology #MarketExpansion
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
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▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
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In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
#fmps #fmps24 #fmevents #ATFXConnect #APACFinance #InstitutionalTrading #FinancialTechnology #MarketExpansion
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
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Ready to Scale? Regtech in Australia, A Global View | FMPS:24
Ready to Scale? Regtech in Australia, A Global View | FMPS:24
In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
#fmps #fmps24 #fmevents #RegTech #Fintech #AustralianFintech #GlobalCompliance #TechInnovation
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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Don't miss out on our latest videos, interviews, and event coverage.
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In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
#fmps #fmps24 #fmevents #RegTech #Fintech #AustralianFintech #GlobalCompliance #TechInnovation
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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Resilience in Trading: From Third Class To World Class | FMPS:24
Resilience in Trading: From Third Class To World Class | FMPS:24
Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
#fmps #fmps24 #fmevents #trading #onlinetrading #tradingexpert #tradingjourney
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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🐦 Twitter: https://twitter.com/F_M_events
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▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
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Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
#fmps #fmps24 #fmevents #trading #onlinetrading #tradingexpert #tradingjourney
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
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IBs and Brokers: The Good, The Bad, The Ugly | FMPS:24
IBs and Brokers: The Good, The Bad, The Ugly | FMPS:24
For most brokers, IBs and trading educators are invaluable partners, driving highly targeted traffic from key regions. However, without proper management, these relationships can quickly turn sour. In this session, gain an insider’s perspective on the types of licenses IBs need in APAC, the crucial details in IB agreements that both parties must scrutinize, common disputes between IBs and brokers and effective resolutions, and the pros and cons of transitioning from IB to broker.
Speakers:
Melody Gao, Senior Lawyer, Sophie Grace
James Perry-Keene, Head of Strategic Partnerships, Pepperstone
Christopher Balanzategui, CEO, N3tworx
#fmps #fmps24 #fmevents #IBAgreements #BrokerPartnerships #TradingIndustry #APACFinance #FinancialRegulation
📣 Stay updated with the latest in finance and trading!
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For most brokers, IBs and trading educators are invaluable partners, driving highly targeted traffic from key regions. However, without proper management, these relationships can quickly turn sour. In this session, gain an insider’s perspective on the types of licenses IBs need in APAC, the crucial details in IB agreements that both parties must scrutinize, common disputes between IBs and brokers and effective resolutions, and the pros and cons of transitioning from IB to broker.
Speakers:
Melody Gao, Senior Lawyer, Sophie Grace
James Perry-Keene, Head of Strategic Partnerships, Pepperstone
Christopher Balanzategui, CEO, N3tworx
#fmps #fmps24 #fmevents #IBAgreements #BrokerPartnerships #TradingIndustry #APACFinance #FinancialRegulation
📣 Stay updated with the latest in finance and trading!
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