The Comeback – Deutsche Bank & US FX Market: Editor’s Pick

Catch up on some of the top stories in the FX and crypto space this past week.

There have been a number of huge developments in the cryptocurrency and foreign exchange (forex) sectors this week – Facebook launched the whitepaper for its stablecoin Libra, TP ICAP entered into the crypto market and more.

In case you missed some of the top and most interesting stories, take a look at our best of the week overview so that you can stay up to date.

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Euroclear to Launch Securities Trading Blockchain

Euroclear announced this week that it is working on a blockchain-based solution for the issuance and settlement of European Commercial Paper (ECP).

As Finance Magnates reported, ECP’s are used by major companies as short-term securities. Firms generally issue them when they need to meet short-term obligations, such as paying staff members.

Euroclear’s solution would allow for the trading of these securities on the blockchain. According to research by Reuters, the ECP market is worth approximately $1.2 trillion.

ASIC Product Intervention Measures Could Take 2 Years

After the Australian parliament passed a new amendment in the Treasury Laws called Design and Distribution Obligations and Product Intervention Power, ASIC now has the power to implement product intervention measures similar to ESMA.

As Finance Magnates analyzed, ASIC-regulated brokers are expected to get circa two years to prepare their business for the new reality of retail trading regulations in Australia. The deadline is expected to be the 5th of April, and ASIC is expected to specify its product intervention measures in the coming quarters.

So what could the future of Australia’s retail trading space look like? Speaking off the record to Finance Magnates, a couple of CEOs are convinced that Australia is going the way of the EU and will likely significantly limit leverage options for clients.

However, others disagree. One senior executive painted a very gloomy picture for the local retail brokerage industry and believed ASIC might ban retail traders from investing in CFDs altogether.

Facebook to Launch Wallet for Libra Token

This week Facebook took the world by storm when it released the whitepaper for its Libra stablecoin. There has been a huge commotion surrounding the cryptocurrency and the Libra network – some good and some bad.

In addition to launching Libra, the social media giant will also be launching a wallet for its cryptocurrency – Calibra. The wallet will be available to users as a stand-alone mobile application, as well as being integrated into Facebook’s Messenger app and WhatsApp.

Facebook said that it expects the application to be ready for use in the first half of 2020. You can read more on the product here.

America is Becoming an Attractive FX Destination Again

After the Dodd-Frank Act was implemented in the United States 2010, many brokers fled the country’s forex market, reducing the number of players to more than forty, down to only five – IG US, Ameritrade, GAIN Capital, Oanda, and Interactive Brokers.

However, with ESMA tightening regulation in Europe and Australia’s regulator looking like it’s about to do the same, brokers are starting to view the US FX market with a fresh perspective.

This week, Finance Magnates analyzed this trend, highlighting some of the key reasons why America is becoming attractive again, such as less competition compared to Europe’s highly-saturated market and more.

TP ICAP Enters Crypto Market

Another big player has entered into the cryptocurrency market – London-based interdealer broker TP ICAP. The firm will act as an intermediary for clients looking to buy and sell futures in bitcoin.

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In the coming months, the broker is also planning on adding non-deliverable forwards in bitcoin. As of now, TP ICAP has one cryptocurrency trading desk in London. If things go well, however, they are likely to open one in the US and another in Asia.

Find out more about TP ICAP’s crypto offering here.

SFC Warns HK Retail FX Brokers Not to Do Business in China

The SFC in Hong Kong published a statement this week warning brokers against doing business in mainland China.

According to the Hong Kong regulator, the Chinese State Administration of Foreign Exchange (SAFE) recently stopped a Mainland China entity from trying to get traders to deposit funds with a broker based outside of the world’s most populous country.

The SFC brought this up as it is also concerned that brokers based in Hong Kong are advertising their services to traders in Mainland China. Find out more here.

Two Brokers Applying for FX Licences in the US

According to documents released by the National Futures Association (NFA), Brightwin Securities and Finance has applied to become a Retail Foreign Exchange Dealer (RFED) last month, as Finance Magnates reported.

The broker is also in the process of applying for NFA membership, Forex Firm status, and to become a registered Forex Dealer in the US.

The second firm looking for a license is Nanshan Jinchuang Co. Originally, the Taiwan-based company applied to the NFA to become a registered Commodity Pool Operator and Commodity Trading Advisor in February of this year.

Last month, the firm appeared to have withdrawn its application for pool operator status. But less than a week after it did that, the firm applied to become a Forex Firm, Forex Dealer and RFED.

“There is No Russian Forex Market”

After the Central Bank of Russia, the official regulator for the country’s FX market revoked the licenses of some of the top brokers operating in the country, the agency effectively killed the legal forex sector in the country.

Nonetheless, forex trading is still prevalent in Russia, despite the central bank’s efforts to encourage residents to diversify their investments or completely move away from FX, demand in the country remains.

This week, Finance Magnates took a deep dive into the current state of the FX market in Russia and asked the question – why does the central bank hate the sector so much? To find out this answer and more, read our analysis here.

Deutsche Bank is Making a Comeback

The final story for our best of the week analysis brings some good news for Deutsche Bank. According to the results from Euromoney’s 2019 Annual Foreign Exchange Survey, Deutsche Bank is staging a big comeback this year.

As Finance Magnates reported, the German lender, which was once the leading FX prime broker, leaped six spots forward to place second in the overall volume global market share survey.

The company has 8.41 percent of the market, trailing only behind JPMorgan with 9.81 percent. Citi and XTX Markets have switched places this year, and are placed 3rd and 4th, while UBS dropped into 5th spot after placing second in 2018.

Deutsche’s leap forward was mirrored in the spot and forwards segment, where XTX Markets took the lead with 9.92 percent of the market. JPMorgan is in the second spot holding a 9.3 percent market share.

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