In the wake of endless probes in various markets, including those surrounding manipulation around the WM/Reuters forex quotes, that have stretched around the globe, Thomson Reuters will look to change foreign exchange trading rules and poised to implement new controls.
The foreign exchange market is the largest in the world with over $5 trillion in daily turnover, but it is the least regulated. The WM/Reuters quotes are undated twice an hour for major currencies and every two hours for minor currencies. There is a 30 second window before a new quote is published, and traders have been manipulating institutional and client orders to reduce their own risk.
Phil Weisberg, global head of FX at Thomson Reuters, said that changes to their Rule Book “through a combination of platform controls and behavioral rules.” There will be a six-week period for feedback prior to the publication of the new Rule Book this summer. A Thomson Reuters statement included that “by raising the bar on expected trading behaviour, the rules aim to discourage abuse, manipulation or disorderly conduct, as well as behaviors that do not enhance liquidity for the market as a whole.”
The proposed changes would include clearly defined guidelines that make it easier to execute orders and prompt more surveillance over client trading activity.