Another One Caught with Fingers in the Cookie Jar

The recent Reuters article concerning the SEC in the USA expanding their probe into foreign exchange trading, did make me smile, “not another custodian caught with their fingers in the cookie jar”.

Now, Custodians are meant to be a conservative, safe and honest pair of hands to hold the assets of investment funds and the likes of you and me, so seeing behavior like this (relying on  opaqueness) does give cause for concern as this behavior is totally unnecessary.

There  is no reason (other than “it has always been done like this”) for a Custodian to rely on opaque FX pricing to make money.  The Custodian holds the assets and FX flows are generated by the assets (e.g. corporate actions on equities).  Therefore, the Custodian already has the flows captured so is guaranteed the revenue anyway!  It’s like having a pocket full of cookies and still raiding the cookie jar “because you can”.

So how do we fix the situation for both the Custodian and the client?

It is very simple – pricing, automation and transparency.

1. The Custodian and customer agree a clear pricing schedule

2. Automate trading of all FX flows in real time

3. Book each trade showing the customer rate and the mid-market reference rate

All three could be implemented using a platform like theCurrencyCloud.com – custom pricing for each customer / currency / trade size, automation of the FX trading, and all trades are booked with a mid market reference rate and the customer rate.

That way, the Custodian still gets the business (and can put their ethical hat back on again), the customer has a fully auditable FX trade history and the regulator can be certain that they will not be called in again – a win win all around!

This really should be a “no-brainer” for the Custodians, additionally they will save costs through automation and deliver better customer service.

Nigel Verdon, CEO and Founder, FX Capital Group

FX Capital Group Launches FX2.0 – A New Style of Currency Brokerage, 100% Aligned to the Customer

FX Capital Group introduces clarity to the currency markets for transactions from £1 – £1 million through the launch of FX2.0

London, 11 May 2011

FX Capital Group, a technology-led deliverable currency broker committed to introducing clarity to the currency markets, is pleased to announce the launch of FX2.0 – a new style of brokerage for transactions from £1 to £1 million, which is 100% aligned with the customer.

Using sophisticated technology and the ‘power of platform’, FX2.0 removes opaqueness from the currency markets for transactions in the £1-£1 million range by:

• Delivering 100% transparent, consistent and fair currency pricing
• Empowering SMEs to understand their ‘true currency cost’
• Removing the marketing myths of ‘100% commission free’, ‘no payment fees’ and ‘better than bank pricing’

FX2.0 technology has created a new landscape for deliverable FX by empowering customers to make informed decisions when purchasing currency. Customers can now see their true currency costs in real-time or historically – whether trading with their existing bank, broker or with FX Capital Group.

The goal of FX2.0 is to re-establish trust in the SME/broker relationship.

Nigel Verdon, CEO and founder of FX Capital Group, says ‘FX Capital Group is delighted to evolve the currency brokerage market by being 100% transparent and consistent with customers. Many existing brokerages and banks claim to offer great things to their customers that are simply not true, for example “commission free” – so we invite all SMEs to take a closer look at these claims and realise they now have the opportunity to fully understand the true cost of their currency with FX2.0.’

For more information:
http://www.fxcapitalgroup.co.uk/takeacloserlook
Martina Doherty E: martina(at)md-comms(dot)com T: +44 (0)7951 057146

FX Capital Group will launch FX2.0 at the IOD Annual Convention in London, 11th May 2011

FX Capital Group will be launching FX2.0 “a new style of currency brokerage 100% aligned with the customer” at the IOD Annual Convention in London, 11th May 2011.

The team will be at the event and we invite you to come and “Take a Closer Look” and see what FX2.0 can do for you.