High-Frequency Trading (HFT) and Central Clearing of OTC Derivatives

What will the of increasing global OTC derivatives clearing be on high-frequency trading (HFT)? As speculation mounts about the impact of centralized clearing on pensions and hedge funds, attention has naturally turned to high-frequency trading. Cleared Derivatives Geared to HFT? Even as the impact of OTC...

Basel III May Change the Way Banks Calculate Risk

The Basel Committee on Banking Supervision (Basel III) has discovered “material variation” in the methods banks have for calculating risk. As a result, regulators may begin to impose new standards of risk calculation across banks. “The preliminary work suggests we may not have the balance...

ESMA Provides Confirmation, Relief for Fears of Front-Margin for Swaps

The European Securities and Markets Authority (ESMA) has said that a new regulatory regime will not impose swaps margin requirements retroactively. The prospect of changing margin costs for enduring trades came to be know “front-margining,” and a substantial amount of worry had developed in...

The National Futures Association (NFA) Introduces New Board Members

The National Futures Association (NFA), the self-regulating body of the futures industry, has announced new board members resulting from “contested” elections. The list of members of the NFA Board of Directors is as follows:   IB Representative: Jeffrey D. Malec Chief Executive Officer...

Euro Resolution Aims to Ease Derivatives Rules for Non-Financial Firms

New derivatives rules are in danger of being undercut in European Parliament as the body works to finalize a resolution that would ease regulation for non-financial firms in particular. This recalibration of rules that once seemed inevitable may lead to uncertainty for banks and the broader market. The...

SEC’s Walter Sets Loose Agenda for 2013: Cross-Border Swaps are No. 1

New U.S. Securities and Exchange Commission head Elisse Walter set the stage for the commission’s upcoming regulatory year on Friday. Walters placed capital raising, market structure, and issues of extraterritoriality regarding cross-border swaps regulation at the top of the agenda. SEC on Cross-Border...

The Future of Derivatives Data: DTCC, CME and SDR’s

The future of derivatives data hangs in the balance as U.S. regulators deal with proposed Rule 1001, which would allow CME Group to report swaps data from its clients who have their swaps cleared with DTCC. The looming case between DTCC and CME had so far resorted to arguments about transparency. Now, DTCC...

Will High-Frequency Trading (HFT) Get the German Treatment in the U.S.?

German regulators have increased the pressure on high-frequency traders, prompting concerns from the market that the country risks damaging its financial sector. Chancellor Angela Merkel has ordered her government to rein in HFT prior to the establishment of a broader European regulatory regime. As is the...

Libor and Euribor Update: Deadline Looms as Banks Cut Bonuses

The Libor and Euribor indexes are under intense scrutiny as regulators wind down the comment period and prepare to issue new rules that may overhaul the industry in the wake of the rate-rigging scandals. Libor and Euribor Comment Period Nearing End The international task force formed by the International...

Tug-of-War over Basel Committee Liquidity Rule (LCR) in Europe

Last Sunday, the Basel Committee announced that it plans to defang a rule that requires banks to maintain easy-to-sell assets. They committee also extended the compliance date to 2015, at which time banks will only be required to meet 60% of the required liquidity. The liquidity coverage ratio (LCR) has been...
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