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London forex fix moves to five-minute window in December

Published 17/11/2014, 15:13
London forex fix moves to five-minute window in December
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By Patrick Graham LONDON (Reuters) - London's benchmark foreign exchange "fixings" will move to a five-minute calculation window from one-minute currently as of 2200 GMT on Sunday, Dec. 14, the WM Company said in a memo sent to banks on Monday.

The move by WM, a unit of State Street Corp (N:STT), follows the levying of the first fines on banks in a row over alleged manipulation of foreign exchange markets and the fixings, used to set reference values for thousands of contracts worldwide.

The widening of the window is also the first clear sign that recommendations made in September by global regulators the Financial Stability Board for changes to the fixings are being implemented by the industry.

Other changes, agreed after consultations with banks, asset managers and other stakeholders, include changes to trading floors which will keep client orders to be executed at the fixing rate separate from spot trading desks.

The London or "WM/Reuters" fix relates to several exchange rates and is compiled using data on actual transactions from trading systems like those run by Thomson Reuters (TO:TRI) and ICAP-owned EBS (L:IAP).

The rates for the fixings, at the centre of a global investigation into alleged market manipulation that saw five major banks fined last week, are calculated by WM.

Thomson Reuters is the parent company of Reuters News, which is not involved in the process.

The memo also said Thomson Reuters Matching trade and order data would be added into the calculation for the euro, yen, Swiss franc and rouble.

(Additional reporting by Clare Hutchison; editing by Mike Dolan and Keith Weir)

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