Hedge funds facing increased scrutiny from expanding FX market

Be careful what you wish for - that’s the advice from State Street to the newest market makers in the $5.3-trillion-a-day foreign-exchange market.

Bloomberg News reports that as hedge funds and automated-trading firms ramp up their currencies businesses, they’ll probably attract more interest from regulators, said Chip Lowry, senior managing director at State Street Global Markets in Boston, in a conference call Tuesday hosted by Greenwich Associates.

Algorithmic trading firm and brokerage KCG Holdings said it’s accustomed to dealing in highly regulated asset classes such as equities and favours a more comprehensive approach to foreign-exchange regulation to give investors better information about pricing, execution and order handling.

“As nonbank liquidity providers become a more important part of the market, they will undoubtedly draw attention of regulatory authorities,” said Lowry, who’s also the chairman of the Foreign Exchange Professionals Association, a Washington-based industry group. “This is going to be a bigger part of the market infrastructure going forward - be careful what you wish for, because with that comes some interesting potential scrutiny.”

To access the complete Bloomberg News article hit the link below:

Hedge Funds Face More Scrutiny as They Expand FX Market Making

From Paschi to German Lenders, Investors Brace for Stress Tests

JefferiesAnd the Best Place to Work in the global financial markets 2018 is...

Register for HITC Business News