Category: News

The US Commodity Futures Trading Commission (CFTC) decided today, in a 5-0 commissioners’ vote, to propose delaying implementation of certain Dodd-Frank Act swap rules scheduled to take effect on July 16 to (at least) the end of the year. The delay will allow more time for the regulators to finalize certain rules which are still a work-in-progress, such as defining which banks, hedge funds and other firms are to be defined as swap dealers.

IG Group reported results this morning for Q4-2011 (the company has a May 31 fiscal year end), and of course for its full year ended May 31/2011. Saw 2% overall revenue growth in Q4, steady if unspectacular. Home base in the UK actually saw a small revenue decline in Q4, £44 million this year versus £45 million in Q4-2010. Australia and non-UK-Europe businesses grew by double digits, offsetting falling Japanese revenues following the implementation of leverage restrictions in Japan. IG Group still does more than half of its business in the UK. Part of the reason for the slow Q4 (March thru May 2011) in the UK was attributed to the Royal Wedding, which effectively caused a week-and-a-half UK trading holiday. The markets reacted positively at first, with IG Group’s share price up 2% in early London trading, although they were basically flat toward the end of the day.

A couple of recent and similar moves by two US regulators, the FDIC (or Federal Deposit Insurance Corporation) and the OCC (or Office of the Comptroller of the Currency), went largely unnoticed in the Forex industry, and in our view were somewhat misinterpreted by those who did notice. However, these moves spoke volumes to us about future competition in the Forex business – in particular about the potential entry of several large US banks into the business.

FXCM’s share price soared on Friday by 11% following the release of information (as reported in Business Insider) that several large and influential hedge fund investors had accumulated significant positions in FXCM stock. The largest reported position was an approximate one million share holding in FXCM by Ken Griffin’s Citadel Investment Group, among the largest and most successful hedge funds in the world.