New Change FX (NCFX) welcomes the recent confirmation of the PRIIPS rules on FX transaction cost analysis (TCA). Andy Woolmer, CEO of NCFX said: “This FX TCA clause provides a clear and firm basis on which to conduct FX TCA. The rule clarifies that when measuring FX costs it is unacceptable to use a single source of data for that analysis”.
NCFX believe that the requirement for aggregated, independent, ex-ante, mid-rate data will enable investors to properly understand costs and therefore make meaningful comparisons between FX service providers.
Annex VI, Point 17 of the PRIIPS legislation (08/03/2017) states:
“In calculating the costs associated with foreign exchange, the arrival price must reflect a reasonable estimate of the consolidated price, and must not simply be the price available from a single counterparty or foreign exchange platform, even if an agreement exists to undertake all foreign exchange transactions with a single counterparty”.