Spring has Sprung and the news keeps on piling on top of each other. The end of the first quarter of the year 2019 is nearing and companies are desperately trying to reach their quotas. Let’s see what are the major developments in the financial markets for this week.
Major Industry News
- 1 Major Industry News
- 2 Major Currency News
The FSCA springs into action in Spring
South Africa has only just recently adopted the “Thin Peaks” model for its financial sector. The whole industry used to be the FSCA’s jurisdiction, but not they are forced to share it with the SARB (South African Reserve Bank). Despite the sharing aspect, FSCA is still able to enjoy their investigative privileged. For, example, if any of the South African Forex brokers listed here would commit something unlawful, the FSCA had to get approval from the higher-ups to conduct investigations. Now, after adopting the Twin Peaks model, the regulator is able to spring into action, the moment they receive reports about a violation.
No Deal Brexit becomes a definite possibility
Theresa May has suffered yet another defeat on her Brexit deal proposal this week. Because of this defeat, more and more companies have started to frantically withdraw their assets from the Island Nation. Most important cases are Barclay’s and the Bank of Scotland, which have been approved to withdraw more than 50 billion GBP from the country.
ESMA calms everyone down about Brexit
European Securities and Markets Authority has seen the general mayhem, that rumors about a no deal Brexit has caused. Therefore it took it upon itself to disclose information about any future amendments in the MiFID regulations connected to derivatives trading.
To keep it short, the regulator said that there will be no changes what so ever.
CySEC updates Investor Compensation Fund
The Cyprus Securities and Exchange Commission has made amendments to its screening procedures about Investor Compensation Fund. This new rule will be applied to every single investment service provider located in Cyprus effective immediately. The regulator will take its time to assess various different companies about their capability to compensate defrauded investors. More specifically, CySEC will review companies to see how likely they are to 1) Violate the rules and 2) Pay for said violation.
FCA may remove Exit Fees from Retail Investment Platforms
The UK is considered to be one of the largest financial hubs in the modern world. In fact, it is such an attraction for financial companies that over the last decade, the amount of financial assets they have been handling has more than doubled. It is believed that there is about $500 billion worth of assets being handled by UK based companies.
Because of Brexit, that amount is now under fire and the FCA needed to think of something to stop the bleeding. They have announced the fact that Retail Investors need to have the opportunity to change trading platforms without having to liquidate their assets first. Therefore the regulator could be looking towards restricting Exit Fees in order to “make the trader’s life more comfortable”.
This will be a great addition to the overall industry, which will move more towards meritocracy.
Major Currency News
GBP/USD on a roll
The GBP took a massive hit when Theresa May’s Brexit deal got rejected on Tuesday. However, its pair with the USD still managed to retain relative stability as the USD had the same problem when information about inflation was released to the general public. There was a small tumble, but now a new upwards slope is being sighted.
It is believed that as long as the pair remains above the 1.3050 marks, it has a chance to continue the growth up towards 1.3120.
As already mentioned the US had a concerning score in its inflation indicator. However, the Eurozone inflation indicator was exactly as anticipated, therefore it didn’t cause too much speculation among the traders. The pair is currently being traded at 1.1324 and has massive potential if the US is able to strike a deal with China. If not, then flat-lining could be a possibility for the next couple of weeks.