FX NOTEBOOK: Clearing Service for Regulated Transactions

MarkitServ and CME Group will work together to clear regulated transactions in foreign exchange. UBS says it fired two traders for serious misconduct. Exchange rates hammer an FX broker’s bottom line. Standard Chartered names Eric Darwell co-head of Asian FX trading for the Americas,

MARKITSERV: The electronic trade processing firm and CME Group will work together to clear regulated transactions in foreign exchange.

The first transaction type: Non-deliverable forward contracts.

The clearing of such contracts will come after a major upgrade by MarkitServ of its interface to CME’s foreign exchange clearing operation.

The upgrade is designed accommodate new regulatory reporting obligations, coming out of the 2010 Dodd-Frank Wall Street Reform Act.

The processes involved in the service are in final stages of testing with a number of MarkitServ clients.

The interface will be upgraded in May to support cash-settled forward contracts as well.

MarkitServ FX processes an estimated 99.9% of all cleared currency transactions globally.

UBS: The Swiss financial services giant said it fired two traders in Singapore for serious misconduct involving the sale of non-deliverable forward contracts.

The assertion camed after Mukesh Kumar Chhaganlal, UBS’s former co-head of macro- trading for emerging markets in Asia, and Prashant Mirpuri, a former executive director, claimed in separate lawsuits that they were fired in a bid by UBS to cover up its role in allegedly manipulating key reference rates, according to Bloomberg. UBS, fined about $1.5 billion in December by U.S., U.K. and Swiss regulators for trying to rig global interest rates, is still being investigated by agencies in Singapore and Hong Kong.

UBS intends to defend itself against the lawsuits, the Zurich-based bank said in its March 22 applications to seal the files in the court cases.

INTERACTIVE BROKERS: The provider of electronic access to trading in stocks, options, futures, mutual funds, bonds and foreign currencies on over 100 market centers in 19 countries has been hammered by … foreign exchange rates.

Capital markets consultants Sandler O’Neill & Partners said “unfavorable FX movements” are knocking out 16 cents a share of Interactive Brokers’ earnings for the first quarter.

That’s dropping its estimate for the firm’s earnings per share to 5 cents, 20 cents below the consensus estimate of 25 cents.

STANDARD CHARTERED: The international bank has named Eric Darwell a co-head of Asian FX trading for the Americas, based in New York.

He comes to the firm after less than two years at Morgan Stanley, where he traded in non-deliverable forward contracts in foreign exchange.

Earlier, he worked at Citigroup on its short-term interest rate trading desk and in generating research ideas for foreign exchange customers.