Foreign exchange
confusing. There is a demand from the buy side for clearer
names that more accurately reflect what the algorithm
does.
At the same time, the UK FCA wants asset managers
to identify the difference between the time the trade
entered the market and when it was executed. The lack
of a central clearer for FX is another potential pitfall of the
market, given the mandating of clearing under DoddFrank in the US (although given the election of Donald
Trump, the future of Dodd-Frank is now uncertain).
There is also some concern on the buy side about the
MiFID II requirement for best execution policies, which
some participants feel could limit the traders’ ability
to exercise discretion and adapt and engage with a
changing market each day. Traders are also frustrated by
attempts from the regulators to bring equities concepts to
FX without sufficient adaptation. “FX is a different market,
and it should be treated as such, and not treated as
just another equity market,” said one participant at the
recent Alpha Trader Forum FX in London in October.