Mitigating conduct risk – making the move towards real-time market surveillance in FX

In today’s fast-evolving regulatory environment, building effective real-time market surveillance systems can be a key differentiator for clients when choosing their FX provider. Now, with the advent of of increasingly sophisticated systems that can predict breaches before they even happen, financial firms are also seeking to turn regulatory necessity into competitive advantage for their trading desks. Caroline Henshaw investigates.

First Published: e-Forex Magazine 58 / Special Report / October, 2014

Currency trading has undergone a dramatic transformation since the global financial crisis erupted in 2008 as regulators have stepped up their oversight and control of financial markets. In the wake of bank failures and colossal losses by “rogue” traders, new more aggressive rules have been brought in to prevent activities that undermine public confidence in the markets and push more trading into more easily traceable electric form. The share of electronic trading in FX markets more than tripled between 2001 and last year to make up around two thirds of transactions, according to Aite Group. The Boston-based consultancy predicts that will rise to 76% of total volume in five years and 81% of spot trading – the buying and selling of currency for immediate delivery. Robin Poynder“The key emphasis for me is that any surveillance programme that aims to change behaviour has to be owned by the business management and driven through in their daily lives,” Regulatory impetus Regulators...continued

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