Euro Hedge Funds Forced to Break Derivatives Rules

Hedge funds in Europe may have to choose whether to break OTC derivatives rules in the U.S. and Europe because of new rules stemming from Dodd-Frank financial regulation. Proposed guidance on extraterritoriality does not include foreign OTC trading rules in its substituted compliance regime. According to...

ISDA Supports Clear Connectivity Standard (CCS) for OTC Derivatives

The International Swaps and Derivatives Association (ISDA) announced that it now supports the Clearing Connectivity Standard (CCS) for reports on cleared OTC derivatives trades. The CCS, according to the ISDA, will improve communication for asset managers, central counterparties (CCPs), and futures...

Foreign Banks Sidestep CFTC Swaps Rule

Two banks in Europe and Asia will dodge a new CFTC rule by refusing to register with U.S. regulators, which would allow them to trade complex derivatives with U.S. financial entities. The news comes as U.S. regulators are under pressure to amend pending and current extraterritoriality rules. DBS Group...

Securities Industry Misreads Rule, Confusion Reigns Over Swaps

The securities industry mistakenly believed it had nine months to comply with a CFTC rule that requires moving swaps into clearinghouses. The rule is meant to curtail the risks associated with dealing in the $650 trillion market. The mistake was based on a misinterpretation of one sentence in the rule, which...

Looming Ban on Naked Credit Default Swaps Tampers Trading in Europe

Pending EU Rules barring “naked” trades in credit default swaps (CDS) have tampered trading flows in European markets. The new rules are meant to eliminate stress in the debt market of the kind that has repeatedly led to European financial crises. Credit default swaps will still be available to investors...

Asian Banks Balk on Swaps Amid Fears of Extraterritoriality

The International Swaps and Derivatives Association (ISDA) said Thursday that Asian banks are pulling back on derivatives trading with U.S. entities because of fears over increasing extraterritoriality. “We have heard there is some pullback. It is an indication that people are thinking of who they are...

ICE and Markit to Link Futures Contracts to Credit Swap Indexes

Intercontinental Exchange INC. (ICE) has obtained license to link futures contracts to credit-default swap indexes owned by Markit Group Ltd. It is believed that futures on credit swaps will open the market to investors who cannot otherwise afford to participate, such as small hedge funds. Terms Between ICE...

Buy-Side Risk Management Adapts to New Swap Rules

A survey by the Professional Risk Managers’ Association (PRMIA) says that buy-side firms are not actively hedging credit valuation adjustments. The annual survey researched the probable response of market participants to forthcoming OTC derivatives regulation. It determined that the use of credit valuation...

Euro Zone Forges Ahead with Financial Transaction Tax

At a meeting in Luxembourg on Tuesday, eleven euro zone member nations agreed to a treaty provision that would launch a “Tobin tax” on financial transactions. “This is a small step for 11 countries but a giant leap for Europe,” said Austrian Deputy Finance Minister Andreas Schieder....

Bart Chilton Answers Swaps Concerns over Upcoming October 12 Deadline

Players in the swaps market voiced concerns about complying with confusing swaps rules set to take effect on October 12.  The CFTC’s Bart Chilton helped eased those concerns on Friday by telling reporters that swaps players are unlikely to face enforcement actions before they get answers to their...