FX Regulatory Landscape with the Full FX

Market Analysis

Chris Leonard-Appleton, head of FX Risk and Regulation at LSEG, and Colin Lambert, have plenty to discuss as regulation continues to shape the FX landscape. The conversation kicks off with a look at the pressure and pain points for the FX industry from the impending T+1 change, including how an extended trading day – most notably a later end-of-day refresh on a Friday – would impact the landscape. In response to Lambert’s observation that it will be something of a revolution in financial markets, Leonard-Appleton suggests, “It’s a revolution we will respond to with evolution – market structure change cannot be effected in seven weeks.” The conversation then moves onto the broader impact of regulation, and where there are divergences in approaches between jurisdictions, most notably between the UK and European Union on pre-trade transparency. Leonard-Appleton notes that it is not all about divergence, however, and points out that there are convergences globally between regulatory regimes, particularly around UPIs, UTIs, and LEIs. The conversation continues out with an in-depth discussion on a potentially huge regulatory impact in the DORA regulation. Leonard-Appleton talks about how the industry is responding to it – and there are a lot of divergences it seems – as well as the type of testing and product development required. “It’s going to be a slow burner until it’s not.” A hugely entertaining chat concludes with a discussion about AI – and whether it is a game-changer for the risk and regulatory role, or a potential nightmare? As AI becomes more prevalent, what are the challenges around the data and, more pertinently, the IP around it?

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