Profit & Loss Events 2011 Yearbook

YEAR

BOOK PROFIT & LOSS

EVENTS

2011

SINGAPORE • BOGOTA • MEXICO CITY • LONDON • NEW YORK • CHICAGO • SANTIAGO • SAO PAOLO • TORONTO

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PROFIT & LOSS EVENTS 2011 YEARBOOK

PROFIT & LOSS EVENTS 2011 YEARBOOK The foreign exchange market is the largest wholesale market in the world, with daily volume averaging $4.7 trillion per day at latest count. Profit & Loss is the premier publisher and conference producer for this massive industry and we are proud to lead the field with our ground breaking programmes, world class technology exhibitions and focus on new and growth markets.

Our aim has always been about being part of this market that we care deeply about, promoting the industry through discussion, analysis, education and networking.

Profit & Loss began hosting industry conferences in January 2000 with a standing room only series in London and New York that looked at “What is e-FX?” and featured a “whoʼs who” of e-FX in those early days.

Over the past decade, our conference roster has grown to a dozen annual conferences and specialised workshops. In 2011, we added two new locations - Colombia and Chile - as well as FX as an asset class workshops for new market entrants from the high frequency and hedge fund sectors.

Profit & Loss Forex Network and Profit & Loss FX Growth Markets events drew record numbers of attendees and exhibitors to our international events this year. More than 3,000 senior industry peers have joined us at conferences in Europe, Asia, North and South America throughout 2011.

Profit & Loss Forex Network Chicago in particular has gone from strength to strength, and is currently the largest annual event for the wholesale FX industry globally, drawing 550 people to our September conference.

We hope you enjoy this roundup of the year, and will join us in 2012 for what promises to be another year of growth, change and opportunity in the FX industry.

Visit our website at www.profit-loss.com for programme, sponsorship and registration information for our 2012 events calendar.

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PROFIT & LOSS EVENTS 2011 YEARBOOK

THANKS TO OUR ANNUAL FOREX NETWORK 2011 SPONSORS: FOREX NETWORK PLATINUM SPONSORS

FOREX NETWORK GOLD SPONSORS

FOREX NETWORK SILVER SPONSORS

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FOREX NETWORK SUPPORTING EXHIBITORS

PROFIT & LOSS EVENTS 2011 YEARBOOK

THANKS TO OUR 2011 EVENT SPONSORS:

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PROFIT & LOSS EVENTS 2011 YEARBOOK

contents: Profit & Loss Asia 2011: Singapore, January 19-20 . . . . . . . . . . . . . . . . . . . .8

FX as an Asset Class HFT Workshop: New York, February 10 . . . . . . . . . . . . . . . . . . . . .11

FX Growth Markets Colombia 2011: Bogota, March 1 . . . . . . . . . . . . . . . . . . . . . . . . . .12

FX Growth Markets Mexico 2011: Mexico City, March 3-4 . . . . . . . . . . . . . . . . . . . . .13

Forex Network London 2011: London, April 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

The Digital FX “Eye on the Client” Awards dinner: London, April 7 . . . . . . . . . . . . . . .18

FX as an Asset Class HFT Workshop: Chicago, May 19 . . . . . . . . . . . . . . . . . . . . . . . . . .20

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PROFIT & LOSS EVENTS 2011 YEARBOOK

contents: Forex Network New York 2011 New York City, June 9 . . . . . . . . . . . . . . . . . . . . . .22

The Digital Markets Awards: New York City, June 9 . . . . . . . . . . . . . . . . . . . . . .24

The Profit & Loss Hall of Fame: New York City, June 9 . . . . . . . . . . . . . . . . . . . . . .24

Forex Network Chicago 2011: Chicago, September 21-22 . . . . . . . . . . . . . . . . . .28

Growth Markets Chile 2011: Santiago, October 17 . . . . . . . . . . . . . . . . . . . . . . .30

Growth Markets Brazil 2011: Sao Paolo, October 20 . . . . . . . . . . . . . . . . . . . . .31

Profit & Loss Canada 2011: Toronto, November 9 . . . . . . . . . . . . . . . . . . . . . . .32

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High Frequency, Derivatives Hot Topics at First P&L Singapore Event Singapore, January 19-20 Profit & Loss headed to Singapore for the first in an annual series of conferences in partnership with ACI Singapore. The inaugural event attracted around 250 market participants to the twoday conference and trade exhibition. Video clips from this and other P&L conferences can be found at www.profit-loss.com

W

ith much of the conversation dominated by the ‘will they, won’t they’ debate concerning FX and regulation, some of the most important discussions centred on the ability of banks and trading venues to help clients navigate the uncertain waters.

The role of China in wider Asia also dominated the agenda over the two days. In a discussion about Growth Opportunities in Asia, Robert Savage, CEO of Track.com, picked up on the running theme of China’s growth potential, adding an air of caution to the debate. “It seems odd to me that people are blind to the idea that China can do no wrong – that it’s immune to the business cycle – that somehow it can majestically manage perfect slowdowns and hit the accelerator at the exact right moment without triggering massive inflation,” said Savage.

“That inflation problem is not just China’s problem. Looking at Addressing the Singapore audience above (left) is Zhu Rong, vice general manager, FX markets growth in the region, it’s no department at China Foreign Exchange Trading Systems (CFETS), and (right) Loh Boon Chye, chairman of the Singapore Foreign Exchange Market Committee and MD at Deutsche Bank. longer asynchronous – one of the positives that used to define the region was the different stories to be told in places like “One way or another, money is going to go into property, India, Taiwan, Indonesia, and China. But that’s less and less equities – markets that cause bubbles here – so the big the case and increasingly, China is the 800 pound gorilla problem we face is more about how to manage that money, eating all the bananas – it puts a burden on China’s policy in that liquidity and money supply growth. An interesting a more difficult way.” statistic out recently is M2 over GDP – since the crisis, this Charlie Lay, then head of regional research at Forecast in ratio has jumped 180% just over the last three years. So the Singapore, turned the discussion to the large investment real problem is all about managing liquidity,” Lay contended. flows the region is seeing. The problem with banks in Asia In a discussion about prime brokerage, algorithmic and isn’t a lack of liquidity, but in fact, too much liquidity, he high frequency trading, Ed Blair, then director of Komodo said. The risk of not managing that money prudently means a Capital Management shared his reasons for moving from lot of that money could go into speculative activity.

London to Singapore to start his hedge fund.

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PROFIT & LOSS EVENTS 2011 YEARBOOK

Blair started his career in Chicago and eventually ended up as head of systematic trading at Bank of America in London until he left in 2007 to start the hedge fund. “I didn’t look at opportunities in London or the US after I left banking. I was curious to come to Asia where I thought there would be a lot of growth opportunities still available – and to a certain extent, the chance to run the clock back by trying smaller, more fragmented markets,” he said.

“I’m very bullish on Asia,” he continued. “The rise of China – I buy into that story to a certain extent, and then Singapore within Asia. Singapore is one of the best environments for starting a hedge fund in terms of the regulatory, tax and personal standpoint – it checks all those boxes. But the barriers to entry for a small hedge fund here are significant.”

Blair said his firm has been less involved on specific strategies for individual Asian currencies such as Korea and Hong Kong, instead trading around 95% G5. “We’re trying to build up cautiously in some of the Asian currencies and are keeping a close eye on the renminbi,” he noted. “As you’d imagine, for high frequency trading I need to be able to trade those currencies frequently, and a lot of those currencies don’t trade frequently and electronically. There is some liquidity through the voice brokers or means not accessible to my algos; it can be very difficult to find historical data. But there are some twists and turns and

quirks that are appealing to us, Aussie and Kiwi have their own little idiosyncrasies which are helpful; Korea has a healthy futures contract, which is an interesting angle; and Singapore is managed against the nominal effective exchange rate basket, which means there are more games we can play there. So sitting in London, the world is clear: euro, yen, sterling, etc – but when you get to Asia, you really have to specialise. You can’t go out and find the strategies that make your year, or make you a big chunk; it’s more about putting a lot of little eggs in a lot of little baskets. But if you’re willing to dedicate the time, and you have to be sitting here in Asia to do so, you can learn them better and find a niche that the guys in London and Chicago have a harder time seeing.

So what does it mean for a Singapore-based trader when the largest FX market is trading in London? “You see blips when other big economies come in, but we also see those blips when they’re asleep – which is partly why we’re here,” said Blair.

The FX derivatives panel took up the regulatory baton, with Eric Maine, head of product and research at Singapore Mercantile Exchange, noting that it is not a foregone conclusion that regulatory bodies like MAS will fall in lock step with other countries. “From Asia’s perspective, the financial crisis is something we didn’t get ourselves into, but has been seemingly put upon us. What it means for us is that there are certain opportunities that may arise for exchanges outside that environment,” he said.

All roads tended to lead back to China, with a discussion on retail FX prompting Trent Beacroft, managing director at Hotspot FX, to suggest that Chinese trading in retail FX will one day “dwarf Japanese retail trading”. I

Starting top left: Eddie Tan, regional treasurer, Asia, Citi; Ed Blair, director, Komodo Capital (now MicroSecond Trading); Michael Nelson, assistant general counsel and SVP, the Federal Reserve Bank of New York; Inaugural event draws a packed room.

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P&L FX HFT Workshop New York, February 10

FX High Frequency Trading Workshop

In our first dedicated FX workshop for the high frequency sector, more than 200 attendees heard from panellists about the nuances of trading in the currency market, its platforms and latest technological developments, as well as the nuts and bolts of how to start your own HF firm.

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PROFIT & LOSS FX GROWTH MARKETS CONFERENCE SERIES

Profit & Loss Heads to Bogota Colombia, March 1 Profit & Loss took its successful FX Growth Markets series on the road in a two-hander that started in Bogota, Colombia for an inaugural event on March 1, and then moved to Mexico City for March 3-4, the fourth year for P&L in Mexico.

A

t the first of what will become an annual conference Hernandez, senior economist in the capital markets group of in Bogota, Colombia, Profit & Loss attracted an the Financial Policy Division at the Central Bank of Chile, unprecedented 300 attendees for an opening who shared insights into Chile’s successes with free trade keynote address by Pamela Cardozo, chief monetary and agreements, while Felipe Gaviria reserve affairs officer at the central bank, Banco de la Lievano, regulation deputy Republica de Colombia. director at Autorregulador del The subject of a regional spot market covering Colombia, Mercado de Valores, provided an Peru and Chile dominated discussions throughout the day. important overview of Cardozo compared the performance of assets in Peru and Colombia’s regulatory Chile with Colombia, noting that analysis of stock price environment. valuation and volatility suggests that the Chilean market is Both conferences were most at risk of over-appreciation, followed by Peru. sponsored by Diamond sponsor Meanwhile, Andres Macaya, business manager of SET FX, GFI Group and Platinum the local spot platform affiliated with the Colombian Stock sponsor Thomson Reuters, and Exchange, revealed plans for a regional spot market serving supported by a dozen supporting the three countries. Daniel Niño, director of economic sponsors, exhibitors and research and strategies at Bancolombia Group, pinpointed partners. this development as one of the major opportunities facing Colombia.

Further panels looked at the opportunities and challenges faced by those trading and investing in Colombian financial markets. As was noted, Colombia has enjoyed a reversal of the consolidation trend of recent years and is experiencing growth as evidenced by the considerable number of new entrants to the market.

Also featured in Bogota were Nicolas Alvarez Top to bottom: Pamela Cardozo, chief monetary and reserve affairs officer, Banco de la Republica de Colombia; “Growth Opportunities in Latin America” panel; Juan Pablo Amorocho, General Manager, GFI Colombia; standing room only at inaugural P&L conference in Bogota.

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PROFIT & LOSS EVENTS 2011 YEARBOOK

PROFIT & LOSS FX GROWTH MARKETS CONFERENCE SERIES

Banxico’s Cortina Showcases Peso Performance Mexico City, March 3-4 At the fourth annual Profit & Loss FX Growth Markets conference in Mexico last month, Jaime Cortina, director of operations at Mexicoʼs central bank, Banco de Mexico, set the tone for the two-day conference with an overview of the structural recovery of the peso/dollar market, as well as the successes of the put option mechanism, which was detailed at the previous yearʼs Profit & Loss conference in Mexico City. Video clips from this and other P&L conferences can be found at www.profit-loss.com

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rading conditions for the peso market are now very similar to what they were before the recent global financial market crisis, with bid-ask spreads having come down sharply after increasing dramatically in October of 2008, explained Jaime Cortina, director of operations at Banco de Mexico.

Before the crisis, daily turnover of FX operations executed through the Thomson Reuters systems were about US$5.5 billion, while currently the average is about $5 billion, so daily trading volumes have recovered to levels very similar to the ones observed in 2007, he noted. “In fact, volumes in the peso/dollar market have recovered faster than in markets of comparable currencies such as the Polish zloty, the South African rand, and the Turkish lira,” said Cortina.

Referring to the BIS’s most recent triennial central bank survey of FX turnover, Cortina noted that the Mexican peso ranks thirteenth amongst the world’s most traded currencies and third amongst emerging market currencies – just below the Korean won and the Singapore dollar.

Further, he noted, compared to the 2007 survey, daily volumes grew 15%, despite the fact that the worst financial crisis in many years occurred between both surveys.

Additionally, volumes traded locally represented one-third of total volumes, the other two-thirds were traded with no Mexican financial institutions involved.

In fact, said Cortina, recovery in trading volumes has been particularly important in cross border operations. “This can be explained due to both more liquidity in different time zones where the peso has traded for years – Europe and America (New York) – and also due to new coverage in the Asian time zone. The peso has become more and more a 24hour currency. In addition, increased algorithmic trading from abroad helps explain why volumes overseas have increased more than volumes traded locally,” he said.

Algorithmic trading has gained important market share in the last three years, he added. “Again, using Thomson Reuters data, we can see that currently a little more than 40% of overall trading in the peso on their platforms is done through machines, or algorithmic trading. Although this 40% is still below the percentages we see in currencies such as the pound, the euro and the Canadian dollar, the main message is clear: algorithmic trading is becoming more and more

Jaime Cortina, director of operations, Banco de Mexico

important over time,” Cortina said.

In terms of price action, the peso is also trading at levels just slightly higher than before the crisis, he continued.

“Although the peso exchange rate is still above the pre-crisis levels, short-term volatility is now trading at similar levels to those seen in the first quarter of 2008,” said Cortina. “Also worthwhile to mention is how the average trade has evolved; it has come down from a size of about $2.5 million to a size closer to $1.5 million. This can be explained by the fact that algorithmic trading has increased its market share and that the trade size through algorithms is smaller than through manual trades by traders.

“Today, the implied distribution of the peso is much more balanced than what we saw in October of 2008 and in February of 2009,” he added. “Over the past six months, we have seen the peso strengthen vis-a-vis the US dollar. There have been many stories around this appreciation, some related to capital flows looking for higher yields, some related to fundamentals that explain this behaviour. I think

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PROFIT & LOSS EVENTS 2011 YEARBOOK

both of them are partially right, although I tend to think that the fundamental story is stronger than the capital flow.”

“Let me explain to you why,” he continued. “First of all, the Mexican economy has recovered faster than what was previously anticipated, led by the better performance of the US economy. In that respect, the recovery has been led by the external sector, which in fact continues to show very strong numbers in spite of the appreciation that the peso has experienced lately. In addition, forecasts of future growth have also been revised upward. For example, at the end of last year the consensus for growth in Mexico in 2011 was 3.65% and today is closer to 4.20%. Finally, although growth has been led by net exports, the latest GDP figures now show that growth is now much more broad based; that is, internal demand is also starting to pick up at a faster pace.

“Higher oil prices, up to now, have represented a positive shock for the Mexican economy. On the one hand, they have contributed to higher net exports. On the other hand, they have also had a positive impact on public finances, since tax recollection from Pemex represents more than 30% of total tax income. However, it is worthwhile mentioning that if recent rises in oil prices prove to be more permanent, and the increase in oil prices negatively affect growth in the US (consumer confidence, etc), this external shock could go from positive to negative. So in fact, oil could turn out to be a negative factor rather than a positive one,” he said.

Another factor Cortina said also helps explain the strength of the

Clockwise starting top right: Luis Opazo Roco, manager of financial stabiilty, Central Bank of Chile “Next Generation Technology” panel discussion; Another packed house at P&L Mexico Gabriel Casillas, executive director, chief Mexico economist, JP Morgan (above).

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peso is the recent approval of a $72 billion flexible credit line for two years, replacing the $48 billion line that expired in April. “This line is positive on two fronts: Our external balance sheet is now more solid, $120 billion in reserves plus $72 billion in the FCL, a position of close to $192 billion. In addition, to obtain the credit line, Mexico had to comply with certain criteria set by the IMF. Therefore, the FCL is also a very good bonding mechanism with the market since incentives are in place to maintain sound macroeconomic policies because if we do not do that, we have the risk of losing the FCL,” he continued.

PROFIT & LOSS EVENTS 2011 YEARBOOK

Clockwise from top: Regulation and the OTC Markets panel discussion Dan Torrey, ICAP, talks on the FX Prime Brokerage, Algorithmic and High Frequency Trading panel Mark Sandomeno, GFI Group

The entry of Mexico’s local government bonds to Citi’s WBI is another important factor that explains peso strength.

“The WBI is a bond index that many global institutional investors, real money investors, use as a benchmark for their portfolios. In fact, this index is used by many Asian funds that before this did not buy assets denominated in pesos.

This is why the inclusion of the Mexican bonds in the index did bring important capital flows to the country,” Cortina noted.

“In fact, in 2010 long term government bonds owned by foreign investors grew by roughly $12 billion, and the major part of these flows can be attributed to the WBI. In addition, recently (since December 2010) Cetes owned by foreign investors have also grown substantially, although we think an important proportion of this position is hedged against currency fluctuation and it is really taking advantage of the arbitrage that recently existed between Cetes rates and peso rates implied in the FX swap market.

“Notwithstanding what I mentioned before, we have also seen important short-term capital flows seeking yield. In that regard, Mexico has not been different from what has been seen also in many other emerging economies,” he said.

“The implied peso rate shows that at least through shortterm FX swaps, a lot of long peso positions are being funded.

During most of this year, this rate has stayed below 4% when interbank repo rates are closer to 4.5%, and we have seen periods where it has been lower than 2%,” he added.

Mexico’s response to capital inflows, said Cortina, has

been different to that of other countries.

“We have not changed our reserve accumulation policy, we have not intervened in the FX market other than through our monthly rules based option, and we have not introduced macro prudential, taxes or capital controls. In fact, Mexican authorities have repeatedly assured their commitment to a floating exchange regime.

“In spite of this, fears that the peso could appreciate sharply since it was one of the few currencies where no intervention or capital controls were being introduced did not materialise and in fact it continues to be one of the few currencies that is still trading below the levels prior to the financial crisis.

“In the long run, we are sure that being consistent with our policy will pay off and even more since we will continue being net importers of foreign capital, and we think investors will appreciate knowing that in this country policy is consistent,” he said.

Meanwhile, with regards to the put options mechanism, Cortina said it has been successful in accumulating reserves without introducing distortions to the market. From March 2010 until now, Banxico has accumulated $5,480 million through this mechanism.

“Its design has favoured dollar purchases when the peso is on an appreciation trend and inhibited it otherwise,” he explained. “A competent communication strategy and the use of this instrument has improved the efficiency of the mechanism.”

He added that only during two months, May and November 2010, was the option not exercised. In four months it was exercised partially and in six months it was exercised completely.

In conclusion, Cortina reflected that trading conditions in the peso FX market have recently improved as Mexico’s economic recovery looks stronger and more sustainable, and that this is a result of favourable fundamentals. He also noted that Mexican authorities maintain a strong commitment to the floating exchange rate regime.

This year’s Profit & Loss FX Growth Markets event drew nearly 300 attendees and, as was the case in Bogota, was sponsored by Diamond sponsor GFI Group and Platinum sponsor Thomson Reuters, and supported by a dozen supporting sponsors, exhibitors and partners. I

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PROFIT & LOSS EVENTS 2011 YEARBOOK

Profit & Loss Forex Network London London, April 7 Profit & Loss kicked off the Forex Network series of conferences in London on April 7th, attracting a record turnout of 300 people. Discussions amongst industry leaders delved into the future of the trading platforms, ongoing regulatory reforms, operational risk in the era of social media, high frequency trading’s impact, derivatives and post-trade developments.

Visit www.profit-loss.com for P&L’s full range of conferences, including the FX Growth Markets series as well as workshops.

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“Eye on the Client” 2011 Profit & Loss Digital FX Awards his is the 10th year of Digital FX Awards unveiled by Profit & Loss and we think we can say without argument that these were revealed at a time of great uncertainty for the FX market. The key was, of course, regulation and its potential impact on single dealer platforms.

Doubt was the word of the year.

One thing that is certain, however, is that whatever the outcome of the regulatory machinations, clients expect their banks to ease the stresses and strains of the transfer to the new world. In this year’s awards we have tried to reflect this sentiment by drilling deeper into certain aspects of the banks’ services likely to be impacted most by those client demands.

In effect we have up-weighted post-trade services at the expense of some front office functions such as FX options and private label services.

This change has manifested itself in a slightly different look to the awards this year. Specifically, we have separated out prime brokerage/clearing from straight FXPB. The latter remains important, but the former is probably a next generation service – something we have tried to reflect.

Also changing this year is the algorithmic execution category.

Here, we have broken out agency execution services, which are increasingly popular, from platform execution services, ie, a platform that allows clients to control their execution (to a degree). As we report in this issue, the standard for algo execution tools is not particularly high as far as some clients are concerned. This is the second year we have received this feedback.

Finally, we have tried to reflect at the top of the awards, excellence in foreign exchange itself. Ever since Barclay Capital’s BARX and Deutsche Bank’s Autobahn hit the top of our awards it has been about more than just FX, this year we are introducing an award for just that – a bank’s pure FX (pun intended) service.

As to the general situation within the e-FX space, it has been an interesting year, but in keeping with the 2009-10 awards, not a huge amount of innovation to show for it. Banks are continuing to reinforce the robustness of their pricing and risk engines, both of which have received several new tests, not least with the surge in market activity during the Greek crisis in April/May 2010. “Below the waterline” has been a popular phrase this year, as banks have continued the reinforcement work that started in 2009.

In last year’s awards we highlighted two areas of client disappointment, if that is the right word – order execution technology

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and emerging markets functionality in general. We believe we are probably 75% of the way along the path to a good choice of flexible, interactive and intuitive order tools. The work is being put in by the banks but pricing and risk management systems must come first and the level of complexity involved in offering flexible execution tools should not be underestimated.

As for emerging markets, well if the customers are disappointed they are being unreasonable (and to be fair we received no criticism at all this year). Several banks have upgraded their emerging markets offerings to the extent that a client has a broad range of choice in NDFs, can leave orders at certain banks, trade under one month and even trade on a local-facing platform. Without doubt, emerging markets is the area of our industry that has advanced the most over the past 12 months.

The breakdown of awards this year reflects a steady trend that has become more apparent over the past two or three years in that the awards are earned on merit. We do not hold, as appears to be the case with certain other awards, that different winners are required to make it interesting – our ethos is very much win by merit, and merit alone. If competitors think that BARX and Autobahn have dominated these awards for too long then the only solution is to work harder on their technology and general service proposition – recognition will be forthcoming.

This is already happening of course, because any gaps that existed three years ago are being steadily eroded, hence we issue our annual disclaimer – the difference between the platforms we judge is wafer thin, hence why the P&L Report Card is as important as the actual winner. Often, we end up with three or more names for each category from our unofficial polling of user opinion. It is then up to us to highlight a minor difference.

While we do not judge volume – rather we seek to pick out granular excellence – we do believe that excellent technology begets volume and market share. As to the human service behind the technology, that is not judged by us, rather that is for clients to judge with their business.

We have only had three winners of our top award in 10 years but this could change in 2012. There are several new entrants to the “e” industry – banks with strong balance sheets, global operations and the ability to invest. We suspect that our awards in 2012 will look quite a bit different, but for now, we humbly present the 2011 Profit & Loss Digital FX Awards…

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PROFIT & LOSS EVENTS 2011 YEARBOOK Eye on the Client

Profit & Loss Digital FX Awards Dinner London, April 7 Spirits were high at the 10th annual Digital FX Awards, unveiled by Profit & Loss on the evening of April 7th in London.

Big winners of the evening collected multiple awards - with Barclays Capital winning best overall platform, as well as three more awards; Citi scooping best FX platform amongst its total of five; Deutsche taking home three. Bank of America Merrill Lynch, BNY Mellon, Credit Suisse, Goldman Sachs, JP Morgan, Morgan Stanley, Nomura, Societe Generale and UBS also scored big on the night.

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PROFIT & LOSS EVENTS 2011 YEARBOOK

The Digital FX “Eye on the Client” Awards Winners Best Overall Platform Best FX Platform

Barclays Capital Citi

Best Multi-Product Platform

Barclays Capital

2011 Profit & Loss Innovation Award

Societe Generale

Best FX Options Platform

Credit Suisse

2011 Editor’s Choice Award

Credit Suisse

P&L’s One to Watch in 2011

Bank of America Merrill Lynch

Best Rates Platform The 2011 API Award

Barclays Capital JP Morgan

Client Segment Awards Best Banks’ Platform Best Corporate Platform Best Real Money Platform Best Leveraged Sector Platform Best Traders’ Platform Best Retail Platform Best Emerging Markets Platform

Goldman Sachs Citi BNY Mellon Deutsche Bank Nomura CitiFX Pro Deutsche Bank

Services Best Post Trade Services Best Prime Services

UBS Deutsche Bank

Best FX Prime Brokerage

Citi

Best Execution (Agency)

Credit Suisse

Best Execution (Platform) Best Order Management

JP Morgan Citi

Best Research Portal

Morgan Stanley

Best Structured Products Platform

Barclays Capital

Best Navigation

Morgan Stanley

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PROFIT & LOSS EVENTS 2011 YEARBOOK

P&L’s Chicago HFT Workshop Chicago, May 19 FX as an Asset Class: High Frequency Trading Workshop

Drew Myers, Banyan

Intro to FX ECNs, Exchanges & Bank Portals

Sudhir Chikara, Takumi

Matt O’Hara, Thomson Reuters

David Matteson, Drinker Biddle

Craig LeVeille, CME

Rob Gomprecht, BofA ML

Joe Conlan, FCStone

David Holmes, Typhon

Jim Fischer, Drinker Biddle

Key Issues in Setting up a HFT Firm

Vince Sangiovanni, GAIN GTX

Bill Goodbody, Hotspot FX

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Darren Jer, MarketFactory

Eisso VanderMeulen, Newedge

PB & Credit Issues in the FX Market

PROFIT & LOSS

EVENTS

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PROFIT & LOSS FOREX NETWORK • PROFIT & LOSS GROWTH MARKETS

SINGAPORE

BOGOTA

MEXICO CITY

LONDON

NEW YORK

CHICAGO

SANTIAGO

SAO PAOLO

TORONTO

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PROFIT & LOSS EVENTS 2011 YEARBOOK

Profit & Loss Forex Network New York New York, June 9 Profit & Loss Forex Network attracted more than 400 attendees and two-dozen exhibitors at the June 9th event. With subjects covering market fragmentation, new market entrants, FX options developments and new business development, the business program drew a standing room only crowd. The full day program culminated with a keynote presentation by Rep Joe Crowley, a member of the House Ways and Means Committee, who provided insight into the climate in Washington, as well as touched on such subjects as FX exemptions, derivatives and high frequency trading.

REP JOE CROWLEY

PAUL MILLWARD, GFI

JILL SIGELBAUM,TRAIANA

MARK SUTER, DIGITAL VEGA

DAN TORREY, ICAP EBS

RAY MCKENZIE, ICE

DAVE OLSEN, JPM DAVE REID, CITI

SANJAY MADGAVKAR, CITI FX PRO

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CRAIG LEVEILLE, CME

PROFIT & LOSS EVENTS 2011 YEARBOOK

Global Harmonisation Needed on Regulation US legislator stresses the need to avoid regulatory arbitrage.

I

n a keynote address at Profit & Loss’s Forex Network conference in New York, Democratic Congressman Joseph Crowley told delegates that international harmonisation was needed as the world implements financial reform.

“I was pleased US Treasury Secretary Geithner agrees with the need for regulators in Europe and Asia to harmonise their regulations with the US or face a ‘race to the bottom’. The current margin rules put US firms at a massive competitive disadvantage,” the Congressman told attendees. “Supporters say this is good; I do not see it that way. These draft margin rules do not stop any activities, they just push it away from US banks and offshore to less regulated markets in foreign banks.”

Stressing the need for the US, and New York in particular, to protect its position in global foreign exchange markets, Crowley stated, “I do not see how this is advantageous at all. There can be a perverse effect to over-regulation – the moving of firms, businesses, activities and jobs out of the US; out of the scope of the US regulatory system.”

The Congressman, who sits on the House of Representatives’ influential Ways and Means Committee and has been involved in financial regulatory reform since joining Congress in 1999, stressed his support for initiatives by the US Treasury Department to make new regulations. But while he acknowledged his support for regulatory reform, he stressed the final version was not what the group of New Democrats, of which he is a leading member, desired.

“The New Democrats drafted the provisions in the House-passed regulatory reform bill to regulate the derivatives market,” Congressman Crowley observed. “The Senate, however, passed a far different bill. Election season can sometimes turn into a somewhat silly season, and many of the Senators negotiating the regulatory reform legislation were facing tough re-elections. Thus, the derivatives portion of the regulatory reform

measure became a bargaining chip. We had the former Chairwoman of the Senate Agriculture Committee taking a position of attacking the financial markets, and in particular the derivatives sector.

“Tied with a Republican Senate minority that effectively excused themselves from the process and refused to work with moderate Democrats like myself to make changes to the Senate language on derivatives to make them more workable – these politics gave us this perfect storm.

“Now, it is up to the regulators to hash out rules on implementation,” the Congressman continued, adding that the New Democrat Coalition has been “very engaged” in the process.

“We welcomed the Treasury DeCONGRESSMAN JOSEPH CROWLEY partment’s decision to exempt foreign exchange swaps and forwards from grams and perhaps some sort of credenmost of the derivatives rules required tialisation certification. He also menunder the Dodd-Frank Act, saying the tioned accountability for those who set market already meets many of the law’s off a runaway program that roils marobjectives. In fact, New Democrats called kets, whether it is innocent or not,” for this action earlier this year.

Crowley stated.

“Like the Treasury Department, we “Last month, SEC Chair Mary recognised that the foreign exchange Schapiro signalled her intent to increase swaps and forwards market already re- scrutiny of high frequency traders, inflects many of the Dodd-Frank Act’s cluding the imposition of trading obligagoals, including high levels of price trans- tions on HFT firms and called for a parency, effective risk management and reassessment of the “entire regulatory electronic trading,” he continued. “New structure” surrounding the firms, in part Democrats also recognise the stability of to determine whether the algorithms or the foreign exchange market and how it strategies used to generate and send orweathered the Great Recession without ders are programmed to operate properly problems.” in stressed market conditions.

Congressman Crowley also made some “I agree that regulations are needed so observations on the ongoing debate in US that HFT can be effectively overseen by political and regulatory circles over high our financial regulators and that the pubfrequency trading. Pointing out that CFTC lic has confidence in our market sysCommissioner Bart Chilton had stated the tem. As with Dodd-Frank, however, we need for stronger regulation of HFT in the need to be thoughtful in how we map out wake of the “Flash Crash”, Crowley the regulations. We need strong, workable agreed that regulations are needed. rules that will protect the public while al“[Chilton] suggested greater over- lowing for the continuation of permissisight, such as the testing of certain pro- ble activities in this country.”

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PROFIT & LOSS EVENTS 2011 YEARBOOK

2011 Profit & Loss Readers’ Choice

Digital Markets Awards New York, June 9 Profit & Loss unveiled the winners of its 2011 Readersʼ Choice Digital Markets Awards at a dinner and ceremony in New York with Citi and Barclays Capital scooping 10 awards between them.

In the bank provider categories, Citi won six awards including Best FX Prime Brokerage, Best Trading Platform for Corporates, and Best Trading Platform for Hedge Funds while CitiFXPro won Best Retail FX Platform. Barclays Capital received four awards, including Best Options Platform and Best Multi-Asset Class Platform.

UBS was voted Best Post-Trade Services provider, Deutsche Bank won the Best Order Management award, Credit Suisse walked away with an award for the Best Algorithmic Trading System and JP Morgan won the Best Matching Platform award.

It was also a night to remember for DealHub, which beat off stiff competition in the Best Post-Trade Services award, the category that received the highest number of votes. Hotspot FX won the Best Trading Platform for Hedge Funds award while 360T received an award for Best Trading Platform for Corporates and FXall for Best Trading Platform for Asset Managers.

Other winners on the night included Icap EBS, which received an award for the Best Matching Platform; GFI Groupʼs Forex Match for Best FX Options Platform, as well as GFI Fenics for Best Risk Management System (FX); Thomson Reuters for Best Market Data Platform; Traiana for the Digital Markets Innovators Award; SmartTrade for Best Multi-Asset Class Platform; and Alpari (UK) Ltd for Best Retail Platform.

Currenex, Progress Apama, FC Stone, Barracuda FX and Calypso Technology also received awards.

For the fourth year, Profit & Loss opened its website in April and May for readers to vote for the best bank, broker and service providers across 14 key categories. More than 10,000 votes were registered in 2011, making it the largest response to date.

Hall of Fame “Class of 2011” Scott Brusso

Claudia Jury

Cliff Lewis

Martin Mallett

Richard Mahoney

John Nixon

David Schulz

Phil Weisberg

In 2009, Profit & Loss celebrated its 10th anniversary by establishing the Profit & Loss Hall of Fame, which sought to recognise those individuals who have made significant contributions to the growth of the foreign exchange industry. The Class of 2011 reflects that ethos, comprising people who have long been held in great esteem by peers and colleagues, both professionally and personally. It is with great pleasure that we unveil the next eight members of our industry to be honoured in the Profit & Loss Hall of Fame: Scott Brusso, Claudia Jury, Cliff Lewis, Martin Mallett, Richard Mahoney, John Nixon, David Schulz, Phil Weisberg.

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PROFIT & LOSS EVENTS 2011 YEARBOOK

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PROFIT & LOSS EVENTS 2011 YEARBOOK 2011 READERSâ&#x20AC;&#x2122; CHOICE DIGITAL MARKETS AWARDS Best Trading Platform for Corporates Bank Providers 1. Citi 2. Barclays Capital 3. Bank of America Merrill Lynch Non-Bank Providers 1. 360T 2. FXall 3. Currenex

Best Trading Platform for Hedge Funds Bank Providers 1. Citi 2= Barclays Capital 2= Deutsche Bank Non-Bank Providers 1. Hotspot FX 2. Currenex 3. FXall

Best Trading Platform for Asset Managers Bank Providers 1. Barclays Capital 2. Citi 3. JP Morgan Non-Bank Providers 1. FXall 2. FX Connect 3. Currenex

Best Retail FX Platform Bank Providers 1. CitiFX Pro 2. Barclays Capital 3. dbFX Non-Bank Providers 1. Alpari (UK) Ltd 2. Gain Capital 3. FXCM

Best Post-Trade Services Bank Providers 1. UBS 2. Deutsche Bank 3. Citi Non-Bank Providers 1. DealHub 2. Logicscope 3. Thomson Reuters

Best Multi-Asset Class Platform Bank Providers 1. Barclays Capital 2. JP Morgan 3. Morgan Stanley Non-Bank Providers 1. SmartTrade 2. CME Group 3. FX Connect

The Digital Markets Innovators Award Bank Providers 1. Barclays Capital 2. Morgan Stanley 3. Citi Non-Bank Providers 1. Traiana 2. MarketFactory 3. FXecosystem

Best Algorithmic Trading System

Best Risk Management System Bank Providers 1. Citi 2. The Royal Bank of Scotland 3. UBS Non-Bank Providers (FX) 1. GFI Fenics 2. Thomson Reuters 3. Calypso Non-Bank Providers (multi asset) 1. Calypso 2. Algorithmics 3. Thomson Reuters

Best Liquidity Aggregation Platform Bank Providers 1. Citi 2. Deutsche Bank 3. The Royal Bank of Scotland Non-Bank Providers 1. Currenex 2. Integral Development 3. TraderTools

Best FX Prime Brokerage Bank Providers 1. Citi 2. Deutsche Bank 3. Morgan Stanley Non-Bank Providers 1. FC Stone 2. Traiana 3. Prudential Bache

Bank Providers 1. Credit Suisse 2. JP Morgan 3. Barclays Capital

Best Order Management

Non-Bank Providers 1. Progress Apama 2. Flextrade 3. SmartTrade

Bank Providers 1. Deutsche Bank 2. Citi 3. Barclays Capital

Best Matching Platform

Best Options Trading Platform

Bank Providers 1. JP Morgan 2. Citi 3. Deutsche Bank

Bank Providers 1. Barclays Capital 2. Deutsche Bank 3. Credit Suisse

Non-Bank Providers 1. ICAP EBS 2. Thomson Reuters Matching 3. Currenex

Non-Bank Providers 1. GFI Forex Match 2. CME Group 3. Digital Vega

Non-Bank Providers 1. Barracuda FX 2. FXall 3. TwoFour

Best Market Data Service Non-Bank Providers 1. Thomson Reuters 2. Bloomberg 3. GFI Group

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PROFIT & LOSS EVENTS 2011 YEARBOOK

Profit & Loss Forex Network Chicago Chicago, September 21-22 Profit & Loss Forex Network Chicago is the FX industryʼs premier event of the year, drawing a record 550 registered attendees to the Windy City in September 2011. Two days of panel discussions featured central bankers, bankers and buy side discussing a wide range of topics including regulation, derivatives, prime brokerage, clearing, growth markets and the latest technology trends.

The accompanying sold out trade show featured more than two-dozen exhibitors showcasing best of breed technology and services.

MARTIN MALLETT, BANK OF ENGLAND

DAVID CLARK, WMBA

MATT O’HARA, THOMSON REUTERS; CLIFF LOWRY, STATE STREET EEXCHANGE; JOHN MIESNER, HOTSPOT; JIM KWIATKOWSKI, FXALL; DAN TORRY, ICAP EBS

ANNA FAUSTINI, SG

JULIAN COOK , GFI

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L-R: ANDY COYNE, CITI; TONY DALTON, BAML; GIL MANDELZIS, TRAIANA, NICK DYNE, MARKIT

VITOR FELLOWS, GTECH

PROFIT & LOSS EVENTS 2011 YEARBOOK

PANEL: ALL CASHED UP AND NOWHERE TO GO

PANEL: THE CORPORATE TREASURER’S ROLE IN MANAGING FX EXPOSURE

PANEL: BUILD YOUR OWN FX EXCHANGE

PATRICK PHILPOTT, DEALHUB; TERENCE OH, UBS; DEREK SAMMANN, CME

JIM KWIATKOWSKI, FXALL; DAN TORREY, ICAP EBS

TOM ROGERS, THOMSON REUTERS; ANNA DIDIER, ICAP; DEBRA LODGE, HSBC; PAUL CHAPPELL, C-VIEW

PAUL AINSWORTH, UBS; MIKE HARRIS, CAMPBELL & CO; MARK SYKES, BAML; DAVE REID, CITI

COLIN LAMBERT, PROFIT & LOSS, PRESENTING HALL OF FAME AWARD TO BANK OF ENGLAND’S MARTIN MALLETT

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PROFIT & LOSS EVENTS 2011 YEARBOOK

Growth Markets 2011 Chile: Santiago, October 17 In addition to Colombia, Profit & Loss extended our FX Growth Markets series to Chile this year, with an inaugural event attended by 100 local market participants in Santiago. Featuring a keynote address by the Central Bank of Chile始s Director of the Financial Policy Division, Kevin Cowan, attendees gained valuable insight into both international and local market developments.

GLOBAL ECONOMIC OUTLOOK PANEL

PHIL HARRIS, 360T

KEVIN COWAN, CENTRAL BANK OF CHILE

BENJAMIN SIERRA, SCOTIA CHILE

SPEAKING CENTRE: GUILLERMO TAGLE QUIROZ, IM TRUST

A FULL HOUSE AT INAUGURAL PROFIT & LOSS FX GROWTH MARKETS CHILE EVENT

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CRAIG LEVEILLE, CME GROUP

LINDOMAR DA SILVA, GFI GROUP

PROFIT & LOSS EVENTS 2011 YEARBOOK

Growth Markets 2011 Brazil: Sao Paulo, October 20 PROFIT & LOSS RETURNED WITH AN INTERNATIONAL DELEGATION TO SAO PAULO TO DISCUSS REGIONAL TRADE OPPORTUNITIES BETWEEN NORTH AMERICA AND ASIA, TECHNOLOGICAL ADVANCES AVAILABLE TO LOCAL MARKET PARTICIPANTS, AS WELL AS THE LEGAL AND REGULATORY CLIMATE IN BRAZIL AND OVERSEAS.

ERNESTO SEMEDO, 360T; MATT O’HARA, THOMSON REUTERS

PANEL: GROWTH DRIVERS IN DERIVATIVES

L-R: DAVID CLARK, WMBA; ANNA DIDIER, ICAP EBS; MICHAEL BERNAL, FXALL; ERNESTO SEMEDO, 360T; MATT O’HARA, THOMSON REUTERS

CARLOS AREIA, PHARE GLOBAL MARKETS

CARLOS FELIPE BARROS, AMERICAS TRADING

L-R: CARLOS BARROS, AMERICAS TRADING; DAVID ALVAREZ, GFI; CARLOS AREIA, PHARE; GREGORY STREET, THOMSON REUTERS; DANILO VIVAN, BRASIL INVESTIMENTOS & NEGOCIOS

MARCELO CARVALHO, BNPP

ANNA DIDIER, ICAP EBS

RICARDO DELLA SANTINA, NORFOLK ADVISORS

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PROFIT & LOSS EVENTS 2011 YEARBOOK

Profit & Loss Forex Network Canada Toronto, November 9 Profit & Loss Forex Network Canada rounded off the year始s conference circuit in Toronto. Kicking off with an opening address by debt management specialist Alex Jurshevski, CEO of Recovery Partners.

Mr Jurshevski has been a vocal pundit on issues pertaining to the Greek debt restructuring, having been a leading advisor to Iceland during its financial crisis. Profit & Loss also introduced featured speaker Felipe Gaviria Lievano, Regulation Deputy Director at Colombia's Autorregulador del Mercado de Valores (AMV), to the Toronto audience, providing exclusive insight into the market of one of the few countries to receive a credit upgrade, while developed countries suffer downgrades. The conference, held in association with the Financial Markets Association - Canada, drew 200 attendees to the conference and accompanying trade exhibition.

SECOND ANNUAL PROFIT & LOSS FOREX NETWORK CANADA HELD IN TORONTO

SOREN HAAGENSEN, SG; HAYDEN MELTON, TR; DANIELLE CARAVETTA, CS; UGUR ARSLAN, AIENTECH

BENJAMIN REITZES, BMO

FELIPE GAVIRIA, AMV

ALEX JURSHEVSKI, RECOVERY PARTNERS

FULINDA ROUSE, ICAP EBS

L-R: JAMES BERGIN, BARCLAYS; JAVIER PAZ, AITE; RAFAEL QUEZADA, CITI; DAVID FALLER, SUNGARD

MARK SUTER, DIGITAL VEGA; BEN ERNEST-JONES, PROGRESS; CRAIG LEVEILLE, CME; JEFF COOPER, BMO; PAUL MILLWARD, GFI

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PAUL CAPLIN, CAPLIN SYSTEMS

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TAKIS SPIROPOULOS, CIBC

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