US foreign exchange dealers revise operational risk standards

The move was spurred by last year’s debacle at a US-based division of Allied Irish Bank, where rogue trader John Rusnak used forex options to help hide five years of losses totalling over $691 million.

The revised document says determination of option in-the-moneyness and the subsequent notification of counterparties should be performed by an auditable electronic system. The document goes on to say that exercising options should be “segregated from sales and trading and performed by staff th

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