e-FOREX : INTERVIEW
We have seen a great deal of interest in the offshore renminbi market. HSBC did the first CNH spot transaction, dealt the first CNH options and were first to create a tradeable CNH index. More people can now access the renminbi market than ever before and as the first bank to offer CNH electronically, we continue to support the development of the market. Te freely floating nature of the currency means that one can buy it, sell it, borrow it, lend it and not having to use NDFs removes the fixing risk. Add the fact that one does not have to pay a premium to hold it (as with the
the best pricing and risk management algorithms but if they were to the last to deliver a price, or react to a risk management signal then those algorithms will struggle. Te more pertinent question is whether success in FX should be directly related to the level of IT and technology spend?
There continues to be increased demand for FX Prime Brokerage from many regions around the world. What steps has HSBC been taking to ramp up your FXPB services to meet this?
Early in 2010, we launched our FX Prime Services business globally. We have desks in Asia, EMEA and the US to cover our growing client base. We have invested in technology and client services in to address client demand across client segments and regions. As our clients grow their business, we are committed to understand their challenges and offer solutions by leveraging our global presence, strong balance sheet and diverse franchise. Many clients come to HSBC as they recognise our expertise in emerging markets and look to us to provide guidance in these markets as they grow their businesses and because of our strength in balance sheet. Our systems and processes are scalable, so as the FXPB service grows, we focus on working closely with our clients to mitigate credit and operational risk as much as possible and add value by helping them to better manage through volatile FX markets.
Why do you think offshore renminbi trading is proving so popular and how has HSBC been extending it’s capabilities in the electronic execution of CNH?
72 | october 2011 e-FOREX
NDF) and it’s easy to understand why CNH volumes are already greater than CNY NDFs.
Many leading FX banks are trying to find the right balance with their tactical and strategic response to regulatory and market changes. How is HSBC addressing the likely impact of new OTC regulatory requirements on your electronic FX trading business?
Tere are still many unknowns in the regulatory environment around what products are in scope in the FX asset class for Clearing, Reporting and execution on a SEF. Designing strategic solutions whilst many requirements remain uncertain is harder. Many requirements will crystalise when final determination regarding the US Treasury exemption of FX Forwards and FX Swaps from the Swaps definition in the Dodd Frank Act is made. HSBC are involved in all relevant industry groups and are working with AFME to keep up to date with the
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