FX committee to review op risk and trading guidelines
NEW YORK -- The New York FX Comm-ittee is likely to revise its guidelines on FX trading and operational risk management this year when it concludes a review into issues arising from the FBI’s arrests of 47 currency traders last November.
Key among the subjects up for review is the thorny issue of points in the broker/trader relationship, says Mark Snyder, new chairman of the Federal Reserve-sponsored committee.
Broker points – the pips a broker may have to recoup on mis-matched trades – can arise legitimately, but became a major part of the FBI’s “Wooden Nickel” investigation, when they were linked to cash payments. Court papers claim traders were “cashing points” – executing trades with brokers at loss-making rates for the bank
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