Looking back at the dramatic effect that yesterday’s action by the Swiss National Bank has had on the entire global FX industry, it is clear that some firms have emerged with a different outcome than others.
Risk management has become a matter for discussion, and is an instrumental part of liquidity provision by some of the largest firms in the world.
Today, CFH Clearing’s co-founder & CEO Lars Holst has issued a corporate statement with regard to the events, stating that “Following the SNB announcement yesterday, CFH Clearing continues business as usual. We have fully automated systems and market leading risk management solutions.”
“In response to yesterday’s events, we have amended all our clients’ Swiss trades to reflect the fills we got back from our banks and have been in close dialogue with our clients and our banks throughout yesterday and today. CFH Clearing has also notified clients that we will increase the margin requirement for CHF pairs to 2.5%. We will review other pairs as well” continued Mr. Holst.
He concluded by stating that “For anyone in our business, yesterday’s event is truly historical and for most of us it is difficult to comprehend. It will have a major impact on the industry moving forward. No doubt the whole industry needs to revise our view on margins and worst case scenarios for how much a major currency can move. We have to ask ourselves if this is the beginning of a new era of volatility and what we can do as an industry to prevent such devastation in the markets in future.”