Russia Curbs HFT & Improves Order Book Quality in FX with New 25 RUB Commission

With the Russian rouble progressing as a popular emerging market trading currency (EMFX), the country's main equities, bonds and derivatives Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term has issued a notification with new charges on the listed currency contract.

From the 20th of January 2014, traders will be charged RUB25 for orders below 50 lots. The new levy was approved by the FX Market Committee and Moscow Exchange's Executive Board and Supervisory Board.

The notification issued by the exchange states that the main purpose is to improve order book quality, however with a growing number of High Frequency Traders (HFT) looking to exploit new opportunities in the liquid EMFX pair, the exchange may be putting out its defensive code of conduct.

Russia has been pushing hard to position itself as global financial hub, with better than expected GDP growth, a large share of the world's oil and gas supplies, not to forget its metals stockpile, the BRICS nation is stepping closer to its reality.

In the financial space the same applies, the merger between MICEX and RTS has created a behemoth of a venue, in addition, the recent enhancements in the London - Moscow data route mean that Moscow is wide open for HFT business. However, the latest ‘charge’ comes as a surprise as it gives mixed signals to the eager High Frequency traders ready to press play on their black boxes.

Trading volumes in rouble FX derivatives have been increasing in 2013 from a year earlier, average daily trading volume in FX derivatives was $17 billion across all rouble contracts in November, the bulk of the trading reported by the exchange is in FX Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term.