FSA Allows CME to Clear Interest Rate Swaps in London

The FSA will allow the CME to clear interest rate swaps, the world’s largest asset class traded by notional value OTC, reports Financial Times. Financial Services Authority The clearance, given by the FSA, will create competition for LCH.Clearnet, a clearing house in the process of being bought by the...

TAIFEX Partners with Eurex to Expand Taiwanese Derivatives Market

TAIFEX, a Taiwan futures exchange, has entered into a deal with Germany’s Eurex Exchange, offering Europe-based traders the ability to clear Taiwanese derivatives products. The partnership between Deutsche Börse-owned Eurex, one of the largest derivatives market, and TAIFEX through a letter of intent,...

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...

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...

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...

Global Derivatives Update: ESMA and Clearing, Italy’s Transaction Tax

Derivatives Transaction Tax in Italy A tax on equity derivatives transactions grew more likely in Italy this week, as the Italian Senate approved a budget containing the seeds of a Financial Transaction Tax (FTT). The bill was first introduced to Italian parliament in mid-October. In the interim, the...

Four Banks Fined $120 Million for ‘Mis-Selling’ Derivatives in Milan

On Wendesday an Italian court found Depfa Bank, UBS (UBSN.VX), JPMorgan (JPM.N) and Deutsche Bank (DBKGn.DE) guilty of fraud. The banks were found guilty of “mis-selling derivatives” (Reuters) to Milan; the four banks were also accuse of lying about the inherent risks of the contract, as well as...

Did European Banks Collude to Rig Euribor?

The European Union and other global regulators are widely expected to bring accusations and penalties against banks suspected of manipulating the Euribor index. Euribor is used to determine how much it will cost banks to borrow from other banks. In this vein, it impacts a wide range of derivatives contracts...