The Exchange "Trade Gap"
At $144,000,000,000 PER DAY accounting GAP the worlds FX Trade is up there with the Grand Canyon for one of the biggest Gaps ever seen. This Gap also reflects the unseen fees and processes that occur during the transaction process. This 3.7% estimated Gap is not surprising. IMS estimates this to be the average transaction gap worldwide.
The Exchange GAP/Eighth Wonder of the World
Recently in 2014 the Wall Street Journal and Bloomberg have been posting a lot of news about the latest FX Transparency concern. The state of California Teachers Pension Fund is suing their financial institution handling there FX for $200M in what they deem undisclosed fees hidden in the spreads. The State of Arkansas is suing for $300M. America’s largest hedge fund Black Rock is also suing. It was reported Washington State was awarded a settlement for $11M. .
Another Recent report by the BIS (Bank of International Settlement) also estimates the Gap to be around the mid 3% range, putting the average daily gap at $144,000,000,000 per day. The BIS is the worlds Central Bank responsible to receive and audit all central banks around the world.
No surprise to us, the BIS finally gave a realistic explanation for this huge GAP in the $4T per day market.
Unregulated entities, particularly unregulated parent companies of regulated entities. Differences can create loopholes for financial groups to establish unregulated parent holding companies that end up controlling regulated entities from a completely separate jurisdiction. The unregulated parent holding company’s jurisdiction may not have related regulated entities or not have legal authority to exercise power or oversight over unregulated entities. This hinders supervision. The unregulated parent holding company is under no obligation to provide information to unrelated third parties, such as foreign supervisors, and is not required to produce the information in a meaningful way. Existing protocols for obtaining and sharing critical information do not address unregulated entities that are higher in the organizational hierarchy of ownership. Page 7 and 8
There are multiple layers of Non-Transparency within the majority of FX Conversions. The BIS states that the retail institution does not receive meaningful accounting of the FX transaction. They describe the accounting of the FX transaction as a contagion. Like the spread of a disease, the accounting permeates to all levels.
If the firm that handles your FX transactions is not receiving meaningful accounting, how can YOU? It is impossible for you to get correct accounting downstream from a contaminated river.
However, IMS is the first organization to provide the POC report, which cleans the upstream contagion and offers True Accounting of your FX transactions and giving s you 100% of the value of YOUR MONEY!