The past two days have resulted in the financial and electronic trading industry being subjected to a litany of announcements from FX firms, exchanges and institutional liquidity providers regarding the measures that they have taken in order to mitigate exposure as a result of the volatile ruble whose value is on a downward spiral, and the ensuing liquidity shortages.
Whilst the firms which have either reduced leverage to negligible levels or temporarily suspended ruble trading until further notice have been issuing statements on their position, firms that are electing to continue business as normal with ruble pairs have been notable by their silence.
Although it is important to note the decisions taken by companies which are taking such action, it is equally of merit to investigate the rationale in place from within companies that are providing ruble liquidity to brokerages as normal.
One such company is Sucden Financial, whose London-based eFX division provides liquidity to retail FX brokerages across the world.
Today, LeapRate spoke to Peter Brooks, Head of e-FX at Sucden Financial, who explained that “Although liquidity has on occasions disappeared from the ECNs, Sucden Financial has continued to allow clients to trade the ruble via our direct bank relationships.”
Mr. Brooks continued by explaining that, whilst there has been a sudden interest in ruble provision via electronic platforms this year, Sucden Financial’s relationship with the Russian currency dates back to the time at which the Soviet Union was disbanded, and Russian currency entered the free market.
“Sucden Financial has been providing its clients with access to rouble trading for over 20 years, including during the last Russian currency crisis. As a result, we have built a reputation amongst our institutional clients for offering such stability of service. Since many of our clients are not just speculators, but have real business needs for trading, we have always felt it is critical to support this where possible” stated Mr. Brooks.
“In response to the extreme moves, we have prudently, but temporarily increased margins to 20%. We will continue to monitor the situation closely and liaise regularly with our clients” he concluded.
Although multilateral trading facility LMAX temporarily suspended ruble trading yesterday, the vast majority of the stalwarts of London’s cast iron institutional financial sector soldier on undeterred, whilst Russian President Vladimir Putin is currently engaged in a large scale press conference at the Moscow Trade Center, at which he stated that he views the current situation to be very much a temporary matter.
Time indeed will tell.