Thomson Reuters revising FX trading standards

Sun Jun 29, 2014 8:01pm EDT
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LONDON, June 30 (Reuters) - Thomson Reuters is revising its foreign exchange trading rules, the company said on Monday, following consultations with market participants.

Foreign exchange, the largest and one of the least regulated markets in the world, has for the last nine months been the subject of investigation by regulators around the world for allegations of price-rigging and collusion between traders.

Thomson Reuters is one of the two dominant global currency trading platforms, along with ICAP-owned EBS.

"We want to make sure people are using the platform for its intended purposes - genuine commercial interest in trading - and ensure that's the kind of liquidity we're getting," said Phil Weisberg, global head of FX at Thomson Reuters.

After consulting with market participants over the last 12 months, Thomson Reuters is updating its Rule Book, a code of conduct designed to foster higher trading standards.

This will outline new guidelines for fill ratios, minimum quote lives, and tick sizes.

Fill ratios measure the proportion of client orders that are actually executed, the minimum quote life ensures orders are available long enough for potential counterparties to trade, and the minimum tick size helps ensure participants place real orders rather than just expressions of interest.

Britain's Financial Conduct Authority and the U.S. Department of Justice are investigating allegations that senior traders shared market-sensitive information relevant for the London fix, which is set at 4 p.m. London time, using actual trades.

London is the hub of the global currency market, accounting for some 40 percent of the $5.3 trillion traded on an average day.   Continued...