Weekly Roundup: Currency & Financial Markets News 31st May

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This week hasn’t been as active as the last one, but there are some new developments in the FX industry in most cases. However, this week we saw one of the most comical events that have ever occurred in any financial industry in the history of mankind.

And in the middle of it all, stands the United States. Let’s find out what these new events were this week.

The USA rebrands Oil

The US Department of Energy decided that the decreasing popularity of the commodity is not beneficial for the United States economy. In its attempt to push its population towards investing in Oil, it kind of embarrassed itself with the international community.

When we first read the news, it looked like something you’d see on The Onion, but it’s true. The United States now refers to Oil as “Freedom Molecules”, and this is not a joke. The government hoped that this would stir up the Patriots and encourage them to invest and drive the demand up. It looks like the US bonds campaign fell on deaf ears because otherwise, such a ridiculous marketing campaign would not be necessary.

Needless to say, the popularity hasn’t grown even a bit.

ASIC implements FX and CFD changes

The ASIC had already published its announcement about the upcoming changes to the reporting of derivative products as early as July 2018.

Now it reminds all of the companies involved in these industries, that the changes will be implemented in July 2019, so they better be prepared.

The changes to the FX and CFD derivative reporting will be as follows. The ASIC will require companies to report transactions to derivative trade repositories with the “life cycle” method instead of the snapshot method.

Japanese FSA is copying SEC crypto ETF relationship

Much like the United States Securities and Exchange Commission, the Japanese Financial Services Authority has shown some disdain and aversion towards crypto ETFs. The US investors have been waiting for months to see approved Bitcoin ETFs, but the SEC is not delivering.

The Japanese FSA has put forward similar arguments that the technology requires more research and clarity to implement into the economy directly. Although it was quite unexpected from Japan to show such aversion to cryptos, as most of their goods and services can be purchased through Bitcoin transactions.

CySEC’s policy to offer 1:50 leverage to traders

The deadline for the European Union-wide product intervention system is fast approaching. Being only two months away, the various financial regulators need to start thinking about their own versions of a regulatory framework.

One of the regulators who has already started working on theirs is CySEC, which put forward an Idea that made nearly every Forex broker and investor jump from happiness.

The Cypriot regulator will allow leverages as high as 1:50 if several circumstances are met by the company. The ESMA regulations did indeed prevent some serious financial damage to the investors by restricting the leverage to 1:30, but it turned out to be too much, as it tampered more with profits rather than losses.

The promotion of CFDs will remain under strict regulation however, and binary options will continue to be banned across Cyprus.

The ASIC releases guidelines for crypto companies

The Australian Securities and Investment Commission, has released guidelines on how to manage and classify ICOs and crypto offerings within the borders of Australia.

According to the report, every company, before launching an ICO needs to consider their product very carefully, and if it falls within the criteria of a financial product, then they need to report it as such.

Every financial product within the country is subject to ASIC regulations and national tax laws, therefore avoiding the classification of a clearly financial resource by an ICO company will invoke serious legal issues, says the regulator.

FCA resists ESMA share trading rules

The United Kingdom’s Financial Conduct Authority has been in a dispute with ESMA over share trading rules in the case of a no deal Brexit. According to the regulator, if ESMA’s strategies were implemented, no EU-registered but UK-listed company would be able to sell its shares to the pan-European region.

This would naturally have massive impacts on the UK economy as well as the financial landscape of Europe. But, according to FCA, talks have been successful as ESMA is already softening its demands, and EU-based companies will be able to trade British stocks in the UK, even if there is a no deal Brexit.

Giorgi Mikhelidze

Giorgi has 3 years of experience in the Forex and cryptocurrency market. He is currently a financial analyst and partnership manager at a financial news website.

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