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Regional e-FX perspective on Latin America


will be done via an exchange or over the counter.”


One encouraging factor is that most technology providers seem confident that the communications infrastructure is sufficiently developed throughout the major LATAM markets to enable increasingly rapid development e-trading of forex.


Conclusion


“Regulatory changes or not, clients throughout the region are beginning to warm up to the idea of using eFX channels to transact business,” concludes HSBC’s Debra Lodge. “Tailoring, but not necessarily personalisation, is the name of the game, we have to be able to support clients in a way they like to trade and the way the market moves, this is certainly not a - one size fits all type exercise.”


Ernesto Semedo


“Both Brazil and Chile are set to see further growth in the use of electronic trading systems because these are countries where volumes are growing at very fast pace,”


deliverable as in Mexico, the United States and the United Kingdom etc.”


However, the process need not be that traumatic for LATAM countries. “Tere are many opportunities for cooperation in Latin America,” says Tod van Name, global head of FX Products, Bloomberg LP, “including a new regional exchange created by the integration of the exchanges of Chile, Colombia and Peru into a single marketplace called MILA (Mercado Integrado Latino Americano). Te Bolsa de Santiago (Chile) is also speaking with Brazil’s BMF Bovespa about sharing technology. From an interbank perspective, many LATAM countries already trade spot over interbank exchange platforms. Eventually as the markets grow here there will be room to expand to NDFs, futures and options. It remains to be seen if this


Te outstanding questions facing electronic FX trading in the region are very much those facing it in other regions of the world, including the major developed centres: what will regulation look like once the politicians and regulators have put the finishing touches to it? Secondly, when will new rules be put in place?


Layer on top of this the history, traditions and requirements of local economic management and the LATAM picture is full of hope and opportunity while cautiously reaching out to the rest of the global FX electronic trading community. All market participants we spoke to were full of optimism for the promise that the region offers for e-trading both for them and their clients.


Central banks bring tail risk challenge to FX markets


More active central bank involvement in currency markets has reduced volatility but also increased tail risk. Investors must be extra vigilant amid greater market uncertainty.


Tim Carrington, Global Head of FX at RBS, discusses the changing influences in the currency markets.


Find out what we think. rbs.com/insight


The Royal Bank of Scotland plc. Registered in Scotland No. 90312. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. The Royal Bank of Scotland plc is authorised and regulated by the Financial Services Authority. The Royal Bank of Scotland N.V. is incorporated in the Netherlands. The Royal Bank of Scotland plc and The Royal Bank of Scotland N.V. are authorised agents of each other in certain jurisdictions.


july 2012 e-FOREX | 69


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