The FX industry has reached a precipice amid regulatory scrutiny worldwide, prompting the coalescence of key industry leading officials to launch the Foreign Exchange Professionals Association (FXPA).
The FXPA is a new trade oriented body, whose constituency represents a number of FX participants from all over the industry. Based in Washington, arguably the epicenter of FX regulation in the United States, the FXPA aims to liaise and work with leading US and international regulators and policymakers in the hope of advocating FX and educating the public and media.
FX itself is a largely enigmatic instrument in the United States, and while it is an afterthought stateside, relative to futures and equity markets, it represents the largest market worldwide, estimated at nearly $5.3 trillion-a-day. With the passage of Dodd-Frank arguably driving the US FX industry towards oblivion, advocates of the industry have regrouped and formed the FXPA to help lobby for their interests, whilst promoting a transparent industry.
The FXPA membership itself is comprised of a number of institutions from all segments of the industry, which includes, among others, buy-side, exchanges, clearing houses, trading platforms, MTFs and technology companies. More specifically, this includes the Bank of New York Mellon, CalPERs, Campbell & Company, Citadel LLC, CME Group, GFI Group, LCH.Clearnet, LMAX Exchange, Traiana and Virtu Financial.
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The man tasked to lead the FXPA at its inception is Adam Cooper, Senior Managing Director and Chief Legal Officer of Citadel LLC. Additional appointments are as follows:
- Derek Sammann, Senior Managing Director, Global Head of Commodity and Options Products, CME Group as Vice Chair
- Craig Messinger, Executive Vice President, Global Head of Trading and Risk for FX, Derivatives, Fixed Income and Equities at BNY Mellon Global Markets, as Treasurer
- Eric Busay, Portfolio Manager, CalPERS as Secretary
In addition to these four appointments, the initial founding board members include Chris Concannon, President & COO, Virtu Financial, Patrick Bartle, Global Head of FX Strategy, LMAX Exchange, Mark Sandomeno, Manager, GFI Emerging Markets, GFI Group, Gavin Wells, Global Head of CDSClear & ForexClear, LCH.Clearnet.
According to Mr. Cooper in a recent statement on the launch of the FXPA, “As technological innovation, new competitive forces, and an evolving regulatory framework redefine the FX landscape, we must promote market structure that fosters robust, efficient and transparent markets for all participants. FX is a cornerstone to our capital markets, and the FXPA is the ideal vehicle to strengthen collaboration across the industry and engagement with policymakers to achieve these shared objectives.”
“This is a watershed moment for FX as we redefine who we are as an industry and where we’re going. FX is facing some hurdles globally; there is historically low volatility; reputational concerns around benchmarking have led to higher levels of scrutiny; and there remains a lack of clarity around regulations. None of us can do anything about the cyclical factors such as volatility, zero interest rate policies or the macros, but we can more strongly represent the voice of the FX industry to positively impact the coming market structure changes resulting from unfolding market regulations, capital changes and client product choice,” added Mr. Sammann in an accompanying statement.
“This is the time for us as an industry to come together, roll-up our sleeves and exhibit leadership. We have to make sure that we are in a position to grow this business for the next 20 years as we have for the last 20 years. The time to act is now,” Sammann reiterated.