Barclays’s $150m fine has inspired the chief of one foreign-exchange platform to change its rule book, a sign of how regulatory action is reshaping the world’s biggest market.
Bloomberg News reports that FastMatch, run by former Credit Suisse director Dmitri Galinov, says it will more strictly monitor a controversial yet common practice known as 'last look' following last month’s Barclays fine.
Last look gives market makers a defense against faster, more sophisticated traders while enabling them to quote prices on a wider range of platforms. But it can be abused, allowing firms to trade or glean the intentions of other market participants virtually without risk to themselves.
The industry has debated last look for years. Some say it’s an obsolete leftover from the beginning of the digital era when the time lag between an order being entered at one bank and confirmed at another was long enough to expose the market maker to unpredictable movements in prices.
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