MOEX Rolls Out New Risk Management, Trading Alterations to Offering

Moscow Exchange (MOEX) will be altering a number of its services and product offerings in the foreign exchange (FX) space, which will see a variety of changes to its futures contracts as well as a new currency pair, among other differentiating factors, per a recent MOEX statement.

The new world of online trading, fintech and marketing – register now for the Finance Magnates Tel Aviv Conference, June 29th 2016.

MOEX’s FX volumes have been on the rise recently, as illustrated in its monthly turnover report published earlier this month. On the back end of increased demand, MOEX has opted to expand a number of opportunities and capabilities to FX market participants, which will collectively aim to improve Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term capabilities for venues and clients.

New Additions

The range of changes seen to MOEX’s offering will take effect only on July 4, 2016. Of these changes, MOEX will offer new deliverable futures contracts on USD/RUB, EUR/RUB and CNY/RUB currency pairs. In particular, the contract lot will be stipulated at 100,000 currency units, with a tick size of RUB 0.01 for USD/RUB and EUR/RUB and RUB 0.001 for CNY/RUB.

Moreover, MOEX has also chosen to unveil a new currency pair for market participants, as it will now be offering the CHF/RUB pair – the primary impetus behind the launch will be to help calculate risk parameters for CHF-denominated bonds, in essence making the currency eligible as collateral.

Finally, MOEX will be beefing up its risk management capabilities, which will include provisions for its collateral requirements. Given an inter-product spread, opposite positions in EUR and USD collateral requirements will be reduced, helping enable trading firms to mitigate their respective funding costs.

MOEX will also aim to help appropriate client risk in the form of trading account registration – this will result in the registering of second and third tier client accounts, tapping into MOEX’s panel of risk management tools.

According to Alexander Afanasiev, Chief Executive Officer (CEO) of Moscow Exchange, in a statement on the new initiative: “In recent years, Moscow Exchange’s FX Market has transformed from a segment of the domestic interbank market to the global trading platform for ruble operations. Today, it is the main marketplace for FX transactions and the centre for establishing the national currency rate.”

"The market enhancements we are announcing today will create new business opportunities for market participants and their clients in FX trading and risk hedging, with fast and effective technology providing new strategies to combine spot and long-tenor FX instruments. This will facilitate market Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term, and reduce costs and risks for Russian and international participants," he noted.