Although not all clearinghouses will be happy, the European Securities Market Authority Association (ESMA) decision to allow more choice in trading and clearing was welcomed by the London Stock Exchange Group (LSEG) and Nasdaq Stock Market, which have long championed greater competition in derivatives clearing. The so-called open access rule, set out under Markets in… Read More >>
Fed Wants New Credit Limits on Top Tier Firms
Global systemically important banks (G-SIBs), of the kind whose imprudent derivatives loan policies shook the global economy, will have their credit exposure restricted under a proposed new Federal Reserve Board single-counterparty-credit-limit rule. “In the financial crisis, we learned that the largest and most complex banks and financial institutions lent or promised to pay large amounts… Read More >>
ISDA to CFTC: Exempt SEF-Compliant European Venues
In publishing a set of principles intended to help derivatives trading firms compare U.S. and European Union (E.U.) trading venues, officials at the International Swaps and Derivatives Association (ISDA) are asking that CFTC officials consider a new exemption for established trading venues in Europe. “If EU trading venues are determined to achieve the same objectives… Read More >>
CFTC, EU Finally Agree on a Clearing Deal
After three years of often bitter political squabbling, the European Commission and its U.S. counterpart the commodities regulator CFTC finally reached an agreement on a common approach to equivalent recognition of central clearing counterparties (CCPs). The two sides, which oversee around 90 percent of the $553 trillion derivatives market, have been at loggerheads over mutual… Read More >>
Beware the Next Avalanche, Warns CFTC’s Sharon Bowen
New regulations may require that “all swaps transactions, whether cleared or uncleared” be reported to a trade repository, but more needs to be done, according to U.S. CFTC Commissioner Sharon Y. Bowen In a recent speech at George Washington University Law School, she called for closing loopholes and ending risky practices, as well for as… Read More >>
Barclays to Transfer Legacy Derivatives to JPMorgan
Barclays Bank (Barclays) has signed an agreement with JPMorgan to divest its legacy derivatives portfolio as part of its non-core rundown strategy — a possible sign that other banks may start to move assets around in order to adjust to the increasingly burdensome regulatory demands for capital requirements. Barclays officials say that “acting through Barclays… Read More >>
Q&A with Numerix: Real-World Models Have Many Uses
(Editor’s note: Numerix, a vendor offering cross-asset analytics for derivatives valuations and risk management, recently announced that it has expanded real-world modeling coverage in the Numerix CrossAsset core analytics stack, part of the 12.5 release. The upgrade offers the new Hull-White 2-factor real-world interest rate model (HW2F RW), which supports calibration to a projection curve… Read More >>
European Firms Dump Derivatives for Easier ETFs
Exchange traded funds (ETFs) are gathering momentum among European institutional investors due to lower fees, ease of use and operational simplicity compared to derivatives. In fact, firms are increasingly using ETFs instead of derivatives and as a tool for diversification and rebalancing portfolios, according to a new report ETFs in the European Institutional Channel, from… Read More >>
Sapient Debuts Portal to Compliance Platform
With the official debut of the CMRS Portal, an outsourced, “low-touch” web link, consultancy Sapient Global Markets is targeting smaller securities firms that have a fairly low volume of derivatives trades to report to regulators and other organizations. The CMRS Portal will allow firms to use the services of the established Sapient CMRS (Compliance Management… Read More >>
Ops Gets on the Blockchain Revolution Bus
Bitcoin, a so-called crypto-currency, may fade before anyone really understands what it was or how it could actually have prevailed in financial services. However, out of Bitcoin’s ashes has risen the humbly named Blockchain technology. The distributed ledger technology that has been propping up Bitcoin has come to the attention of major industry players. This… Read More >>
