Buy-side Perspectives Issue 7 | Page 41

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.