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ECU Group Accuses HSBC of Fraud and Misconduct Made on Its FX Trading Desk

ECU Group Accuses HSBC of Fraud and Misconduct Made on Its FX Trading Desk

Currency manager ECU Group has accused the multinational investment bank HSBC of fraud and misconduct within its foreign exchange (forex) trading desk between 2004 and 2006. According to a report published by the Financial Times, quoting a hearing at the UK High Court on Monday, an alleged “rotten culture” between such a period allowed bankers to misuse confidential data.

In fact, the ECU Group claims that HSBC is responsible for having committed fraud related to 52 forex trades it placed with the bank in those years. The allegations were made in the context of a trial that expects to last for a least seven weeks. The banking giant denied all the claims made by the currency manager, the FT said.

But this is not the first time the group made similar accusations against the British multinational investment bank. In February 2006, ECU Group said that HSBC traders incurred misconduct, allegedly traded using confidential information of an upcoming client order. “It also alleges that HBPB, HSBC’s private bank, engaged in ‘pip theft’ where it added secret ‘pips’ or mark-ups to execution prices reported to ECU so as to secure an unlawful profit,” the Financial Times added. The group is an HSBC customer.

Reminding 2013 Forex Manipulation Scandal Case

After conducting an internal investigation on alleged unusual forex price movements during that year, HSBC found no evidence of misconduct. “ECU’s case is that HSBC’s foreign exchange trading desk between 2004 and 2006 were rotten. Traders treated clients’ orders as an opportunity for self-enrichment,” Richard Lissack QC, lawyer of ECU Group, alleged during Monday’s court hearing.

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However, HSBC refuted allegations on the lawsuit, saying the following regarding the ECU’s current legal process against them: “[it is] a farrago of contrived and legally incoherent claims.”

In 2013, the banking giant faced a scandal related to forex market manipulation. At that time, HSBC had to pay around $393 million in fines to the UK Financial Conduct Authority (FCA) and $276.5 million to the US Federal Reserve.

Last month, Finance Magnates reported that HSBC exited from the US mass retail banking market.


PrimeXM’s Monthly Trading Volume Rises 6.45% YoY for May 2021

PrimeXM’s Monthly Trading Volume Rises 6.45% YoY for May 2021

FX trading industry technology provider, PrimeXM, released its monthly trading volume report for May 2021, highlighting a 6.45% year-over-year increase. Specifically, the monthly trading volume posted a total of $941.64 billion for May, which is up compared with the last year’s figure of $884.61 billion, considering all the data from its three major data centers.

Per the Average Daily Volume (ADV), it was $44.84 billion in May, which is near a 10% month-over-month improvement. According to the report, the highest daily trading volume of the month was May 16, where $59.53 billion turnovers were recorded.

Total trades for the month were 27.57 million, said the FX trading technology provider firm. “Over 76% of the total monthly traded volume was recorded in our Data Center located in LD4 – $719.19 billion in notional value. The Data Center in NY4 has remained in 2nd place consecutively for the third month with a $140.41 billion, which saw a significant 10.67% MoM growth,” it added.

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Figures in the Forex Space

In the FX sphere, XAU/USD remained as the most popular instrument traded for the last few months, said PrimeXM. In fact, its total trading volume hit $290 billion in May, representing an increase of 12% month-over-month. On the same line, EUR/USD and GBP/USD were respectively the second and third most traded pairs, with a combined volume of $232 billion, the report highlighted.

Finance Magnates reported in the monthly trading volume for April 2021 in PrimeXM that it firmly corrected during such a month. The figure came in at $897.59 billion, which is 15.18% down from the previous month’s $1.06 trillion.

The company also detailed that the ADV for the month came in at $40.80 billion, compared to March’s $46 billion. The platform handled 27.03 million trades in the month, which dropped by more than 21 percent month-over-month.


Eurex Reports Strong Growth in Derivatives Contracts during May 2021

Eurex Reports Strong Growth in Derivatives Contracts during May 2021

Eurex, an international derivatives exchange and a member of the Deutsche Börse Group, released its trading numbers for May 2021 today. The exchange reported a total of 137.4 million derivatives contracts in the last month, a number which is up by 13% compared to 121.8 million traded derivatives contracts in May 2020.

According to the numbers, European interest rate derivatives and European equity derivatives spiked by 37% and 41% respectively. However, a drop of nearly 8% was reported in European equity index derivatives contracts during May 2021.

“Eurex’s OTC Clearing business saw IRS volumes grow in terms of both notional outstanding, up 15 percent from 18,960 billion to 21,440 billion EUR, and average daily cleared volume, which grew 25 percent from 17 billion to 21 billion EUR compared to the same month last year. Overall clearing notional outstanding grew 15 percent, while overall average daily cleared volume dropped 33 percent across the same period. Eurex Repo saw drops in monthly term adjusted volumes; of 46 percent in GC Pooling and 12 percent in the Repo Market,” the exchange mentioned in the official announcement.

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In April 2021, Eurex saw a jump in its average daily cleared volume. The exchange recorded a substantial growth in its OTC Clearing Business.

Eurex in 2021

Since the start of 2021, Eurex has announced several partnerships and launched new products to increase its offerings. Earlier this month, the exchange introduced new derivatives for expansion in Asia. Eurex launched futures on the MSCI China Tech 100 Index along with futures and options on the MSCI Hong Kong Listed Large Cap and the MSCI China Hong Kong Listed Large Cap indexes. Additionally, the exchange announced a partnership with Korea Exchange in March 2021 and mentioned that the Korean benchmark index (KOSPI 200) futures will be listed on the Eurex/KRX Link.

“This growth in May comes after a mixed few months in 2021 due to comparisons with the unprecedented volatility in early 2020,” Eurex added in the press release.