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Insights, analysis, and updates from the National Introducing Brokers Association

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Swaps FX

July 21, 2014

2 min read

CME Direct/ClearPort Agency Cross

Agency Cross on CME Direct On June 9th the CME launched Agency Cross on CME Direct. Agency Cross, also known as non-block trading, allows brokers to trade ClearPort products directly into Globex in non-block sizes. Block trading restrictions have become a major area of contention for many IBs. Agency Cross functionality is a welcomed addition for many brokers and traders, besides being a necessary addition by the CME to keep up with ICE. Agency Cross was rolled out to little fanfare as many firms were not even aware of it's introduction. This was more of a soft launch for the CME to test their systems and technical infrastructure. With the success of it's initial launch, the The CME is confident that additional markets will become available this October.  The standard ClearPort qualifications still need to be met by clients and the product listing is still missing many of the popular...

Trading Technology for Retail FX

Trading Technology for Retail FX  The FX market offers many advantages to active traders – 24 hour trading, low transaction costs, the ability to earn interest on overnight positions, plus deep liquidity from a $5.3 trillion/day market.   One of the most important advantages though is the abundance of top notch technology and trading platforms that are offered completely free to traders by FX brokers.     FXCM, one of the largest FX brokers in the world, offers an array of free platforms and technology that allow for advanced system trading, an increasingly popular trend in FX trading.      Additionally, FXCM now offers system developers the opportunity to sell and distribute their custom strategies on FXCMApps.com Metatrader4 MetaTrader 4 (MT4) is the most popular and widely used trading platform among retail forex traders.  The popularity of MT4 is primarily due to the fact that it allows traders to customize...

Legacy Swaps Brokers and Regulatory Outtrades

Traditionally, counterparties executing swaps transactions in the unregulated Over-The-Counter (“OTC”) marketplace maintained entire teams of staff devoted to the credit or delivery risk of a counter-party. Inclusive in this regime was the preeminent notion that brokers never held client funds of any kind. This key discrepancy may cause various regulatory outtrades between regulators and parties in the Introducing Broker regime, most notably the legacy swap broker and the traditional Introducing Broker (“IB”). With the move to central counter-party clearing, it is likely that legacy swaps firms will see a cost-shift to that of compliance.  The rules promulgated in response to the Financial Crisis of 2008 and subsequent failures of MF Global and Peregrine Financial Group (“PFG”) have focused primarily on the protection of customer assets and increasing market transparencies. New methods of execution, whether mandated by federal authorities or unintentionally created from dark liquidity pools, have caused significant discrepancies with...

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