AMERICAS INTERVIEW What impact has regulatory compliance had on operations? The FX market continues to be driven by regulatory changes and market events. The development and final version of the FX Global Code of Conduct was widely reviewed during the quarter and is set to be released on May 25th. March 1st saw the general implementation of margin requirements for non-centrally cleared derivatives which was a significant undertaking by most FX participants. These regulatory requirements continue to shape the functioning of the FX market, promoting best practices and sound financial management. However, the market volumes have continued to decrease as has the market volatility outside of specific geopolitical events such as Brexit and the French election. This has caused liquidity dislocations, with significant FX market moves tied to unexpected announcements or voting outcomes. Overall the market continues to function well. Let’s talk for a minute about BMO Capital Markets global presence. BMO very much has a global presence. We have feet on the ground in the major trading centers, including 3 offices in mainland China so we are well equipped to effectively handle client requests whenever they arise. As well, we have offices across Canada and are able to offer our clients a very thorough and in depth analysis of the Canadian market. We are very proud that we are consistently ranked as the leader in the FX market for the Canadian Dollar. Can you tell us more about your trading base and the advantages your trading platform offers investors? As a major Canadian bank, we are all things CAD to our global client base which is the foundation of our trading base. We have been strategically investing in our US platform for years. We are bringing new products online and continuing to develop our electronic offering to our multi-segmented client base. As these products mature in development, we market them globally to our European and Asian clients. We also like to emphasize BMO’s long history and solid credit rating as this really appeals to our clients. What are some of the resources BMO Capital Markets makes available that help traders understand market performance and create a daily trading plan?
BMO Capital Markets has an economics team in Toronto that provides daily and weekly publications along with post-event analysis of economic data and events. In addition, BMO has a cadre of equity, fixed income and FX market strategists embedded within their business units in New York and London. These strategists all have regular and bespoke publications. Our strategists are recognized globally and are always involved in our client solutions. What types of ongoing support do you have available for clients? Our clients are at the centre of all we do. BMO’s success has been built on partnering with our clients in a strategic and long term relationship. Our salespeople, strategists and economists are always available to our clients. Our strategists are very good at breaking down market breaking news and translating that information quickly into trading views and ideas. As well, we regularly have our traders speaking to clients who can have insightful information as it unfolds in the market. Looking at your business strategy for this year, are you launching any new products or services or entering any new markets this year? We are always looking at ways to expand our breadth of product offering, particularly when it is driven by our clients who are looking for innovative ways to manage and hedge exposures in their portfolios. The BMO Metals group continues to develop and implement dynamic and static strategies to assist clients with exposure to precious and base metals. Our products include spot, forwards and options. We also offer financing capabilities with the ability to lease, consign, and borrow base and precious metals. As well, we are investing in more MBS/ABS and US Investment Grade products, in both secondary trading and increased distribution. Further, we plan on leveraging our BMO China Capital Markets activity by becoming the first Canadian to offer Chinese Government bonds to our global client base. “The opinions expressed in this article are the author's own and do not necessarily reflect the view of BMO Capital Markets and/or its parent and affiliates.”
John Leclair Managing Director Global Head of Foreign Exchange Options BMO Capital Markets John Leclair is the Managing Director, Global Head of Foreign Exchange Options and has responsibility for the firm’s idea generation, execution and management of FX derivatives.
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