Why did brokers only increase margins on GBP pairs? Indices and gold volatility very high

During the advent of yesterday’s referendum on Britain’s membership of the European Union, many firms took prudent measures by increasing margins on pairs which include the British Pound in order to make provision for any ensuing volatility once the outcome of the referendum became known. In a remarkable outcome, Britain’s electorate voted for the country […]

GBP Pairs brexit

During the advent of yesterday’s referendum on Britain’s membership of the European Union, many firms took prudent measures by increasing margins on pairs which include the British Pound in order to make provision for any ensuing volatility once the outcome of the referendum became known.

ar
Andrew Ralich

In a remarkable outcome, Britain’s electorate voted for the country to exit the European Union with 52% of the 72% of the adult population which casted votes having elected for the country to become an independent sovereign nation, after a sustained period of uncertainty as the polls showed a consistent equilibrium between those in the ‘leave’ camp and those in the ‘remain’ camp.

Now, as Britain goes it alone and frees itself from the burden of bureaucracy of the European Union, a period of volatility ensues and the markets have reacted to this unexpected outcome.

An interesting perspective that has come to light is that whilst most firms concentrated on currency pairs involving the Pound, stocks and indices as well as pairs involving non-European currencies remained tradable under existing terms, with no margin changes.

Today, Andrew Ralich, CEO of institutional FX software development company oneZero spoke to FinanceFeeds on this matter “In terms of technology preparation, from our perspective, we feel that Brexit was a success across the board.”

“At oneZero we saw some unprecedented load on our systems, but throughout the slide we had no reports of execution or connectivity challenges. What will be interesting to learn about in the days to come is how brokers fared with this unexpected move, specifically those who chose to adjust margins on GBP and EUR crosses only. It’s safe to say that many brokers who announced their margin changes leading up to the event did not anticipate the massive moves we saw across the board, specifically in JPY, Indicies and Gold” concluded Mr. Ralich.

 

Read this next

Digital Assets

Luxembourg’s regulator warns on false regulation of Crypto Capital Profits

The regulator of Luxembourg’s financial markets, the Commission de Surveillance du Secteur Financier (CSSF), has warned that a firm claiming to be authorized under the name Crypto Capital Profits is in fact not licensed to carry out business from within its jurisdiction.

Institutional FX

FINRA fines Wedbush $900K over reporting violations

The Financial Industry Regulatory Authority continues to take disciplinary actions against financial services firms for providing inaccurate securities trading information.

Digital Assets

Bitkub investigated by Thai regulator in ‘wash trading’ case

Thailand’s Securities and Exchange Commission has targeted Bitkub over allegations of inaccurate reporting and wash trading on its cryptocurrency platform.

Crypto Insider

Crypto.com secures approval to launch its services in France

Crypto.com has registered its cryptocurrency services with the dual regulatory structure in France, which includes the Autorité des Marchés Financiers (AMF) and the Autorité de Contrôle Prudentiel et de Résolution (ACPR).

Inside View

How to offer iOS compliant trading apps? Editorial by Chris Rowe

Webtraders are becoming increasingly important for FX and CFD brokers as more and more of their clients are trading using their mobiles. 

Institutional FX

SpiderRock deploys Eventus trade surveillance for futures and options offering

“As we have begun to provide direct market access as a routing broker and grown in our futures offering, which is subject to a different regulator, we wanted to make sure we chose a trade surveillance platform that has all the tools that we need, a format we can review easily, and capabilities to demonstrate to regulators that we have the proper trade surveillance procedures in place. Validus checks all the boxes for us.”

Industry News

Space and Time raises $20 million to grow its decentralized data warehouse

“We look forward to seeing the ways in which Space and Time will allow the business logic in centralized systems to be automated and connected directly to smart contracts.”

Digital Assets

Mastercard, hi app partner to issue cards with NFT avatars

In partnership with Mastercard, crypto and fiat financial app hi is launching what it calls “the world’s first debit card featuring NFT avatar customization.”

Digital Assets

Wirex to support government of Uzbekistan to adopt blockchain

“We’re excited to work alongside the Uzbekistan Direct Investment Fund in order to help the sector thrive, enrich the financial ecosystem there and set a benchmark for other countries, and ultimately expand.”

<