Prime brokers shun forex agency desks over CFTC rules
Agency desks warn they could be driven out of the market as a result of business conduct rules
Some foreign exchange agency brokers have been forced to withdraw from non-spot transactions as a result of recent amendments to external business conduct rules under the Dodd-Frank Act, which have led prime brokers to terminate double-give-up agreements that involve two buy-side firms trading with each other through prime brokers.
Prior to a no-action letter issued by the Commodity Futures Trading Commission (CFTC) on April 30, the business conduct rules would have required prime brokers to
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