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Screenshot of a breaking news alert e-mail from Q2 2017
Today marked the launch of the Foreign Exchange Professionals Association (FXPA), a new trade body uniquely comprised of a cross-section of FX industry participants. Based in Washington, DC, FXPA’s aim is to engage key US and international regulators, policymakers, the general public and news media, through a combination of education, research and advocacy to advance a sound, liquid, transparent and competitive global currency market.
Diversity of membership is embedded in FXPA’s organizational construct to ensure wide representation of the professional FX market. Founding members epitomize this diversity – including the buy-side, exchanges, clearing houses, trading platforms, MTFs, technology companies, banks and non-bank market participants. FXPA launched with membership from The Bank of New York Mellon, CalPERs, Campbell & Company, Citadel LLC, CME Group, GFI Group, LCH.Clearnet, LMAX Exchange, Traiana and Virtu Financial. Squire Patton Boggs serves as counsel to the FXPA.
FXPA elected Adam Cooper, Senior Managing Director and Chief Legal Officer of Citadel LLC, as Chairman; Derek Sammann, Senior Managing Director, Global Head of Commodity and Options Products, CME Group as Vice Chair; Craig Messinger, Executive Vice President, Global Head of Trading and Risk for Foreign Exchange, Derivatives, Fixed Income and Equities at BNY Mellon Global Markets, as Treasurer; and Eric Busay, Portfolio Manager, CalPERS as Secretary on September 16. In addition to the four officers, initial founding board members include Chris Concannon, President & COO, Virtu Financial; Patrick Bartle, Global Head of FX Strategy, LMAX Exchange; Mark Sandomeno, Manager, GFI Emerging Markets, GFI Group; Gavin Wells, Global Head of CDSClear & ForexClear, LCH.Clearnet.
By representing a wide range of interests, FXPA fills a gap in the industry for a trade association that can provide strong advocacy for the FX industry as a whole. FXPA’s initiatives will be member-driven and addressed by consensus, with a primary objective of educating regulators and policymakers.
“As technological innovation, new competitive forces, and an evolving regulatory framework redefine the FX landscape, we must promote market structure that fosters robust, efficient and transparent markets for all participants,” says Cooper. “FX is a cornerstone to our capital markets, and the FXPA is the ideal vehicle to strengthen collaboration across the industry and engagement with policymakers to achieve these shared objectives.”
“This is a watershed moment for FX as we redefine who we are as an industry and where we’re going,” adds Sammann. FX is facing some hurdles globally: there is historically low volatility; reputational concerns around benchmarking have led to higher levels of scrutiny; and there remains a lack of clarity around regulations. None of us can do anything about the cyclical factors such as volatility, zero interest rate policies or the macros, but we can more strongly represent the voice of the FX industry to positively impact the coming market structure changes resulting from unfolding market regulations, capital changes and client product choice.
“This is the time for us as an industry to come together, roll-up our sleeves and exhibit leadership. We have to make sure that we are in a position to grow this business for the next 20 years as we have for the last 20 years. The time to act is now,” Sammann continues.
Busay notes: “The recent regulatory environment made it clear that the foreign exchange community did not have a single voice. The FXPA brings together a diverse range of parties such as the buy-side, sell-side, exchanges, technology providers – and potentially any other interested groups – to be able to help educate, and discuss the evolution and future of the currency markets.”
“The FX market is one of the most efficient and diverse markets in the world,” says Concannon. “We believed it was time to construct a global and diverse organization that not only represents that market, but could begin to craft new standards and best practices that would be welcomed by that market. FXPA delivers on the goal of welcoming all participants in the FX market while communicating with one, very expert and authoritative voice.”
Wells adds: “The FXPA encompasses, for the first time, the interests of all sides of the industry including the buy-side, exchanges, clearing houses, intermediaries, technology providers and banks. This equates to a strong advocate for the FX industry at a time when the market is facing widespread structural change and reform. By working together as an industry, we hope to address issues and develop solutions that will benefit the FX market for the long-term.”
“GFI is pleased to be one of the founding members of FXPA. This group is made up of participants from every vantage point of the market. We believe this organizational diversity will provide an impartial and constructive resource as the market evolves,” says Sandomeno.
“As the first regulated MTF for FX, LMAX Exchange looks forward to being a part of such a talented and diverse working group,” adds Bartle. “Our goal is to engage regulators, professionals and the public on the industry issues and future policies to ensure the core principles of transparency and fairness, without jeopardising the self-regulating nature and efficiency of the FX market.”