13 Feb 2018 — Bill Hodgson

We all know using notionals to measure the size of the OTC market leads to crazy headlines, so the CFTC has a cunning plan for that

19 Jul 2017 — Alan McIntyre

On Monday the 10th of July the CFTC published this roadmap that gives a view of the trail leading to Christmas 2019. It might only be the start of Q3, 2017 but this ten-page document means we can take a sneak peek under the tree and see what the 2019 Christmas pressies contain.

01 Sep 2016 — Bill Hodgson

It amuses me that the CFTC Commissioners publicly criticize their own organisation, on their own website. Sort of like kicking yourself up the backside shouting "idiots idiots" at the same time. Anyway, read the update from Commissioner Giancarlo below who expresses the mismatch in regulatory timing on the bilateral margin rules, original here.

04 Aug 2016 — Kiran Anand

In keeping with my passion and theme of 'Chaos to Clarity', I want to decode CFTC's Straight Through Processing (STP) 10 minutes rule which has gone into effect on August 1, 2016.

27 Oct 2015 — Samantha Hodgson

In response to the financial crisis that began in 2008, the leaders of the Group of Twenty (G20) nations agreed to a series of measures following concerns about systemic risks in over-the-counter (OTC) derivatives markets. The financial Stability Board (FSB) tasked with revamping the system initiated steps ranging from transparency of the over-the-counter (OTC) derivatives market, protecting against market abuse and mitigating systemic risk.

31 Mar 2015 — Jon Skinner

With regard to systemic counterparty risk reduction the bank regulators' minimum capital, liquidity reserve and margin levels are a major incentive.  The current fine-tuning debate and regulatory rule adjustment are understandable given the financial implications.  

By contrast the lack of discussion of clearing mandates might imply they are a straight systemic counterparty risk win through promotion of consolidation, netting and margining in CCP facing portfolios.  Unfortunately it is not that simple - clearing mandates also entrenching bilateral counterparty risk by limiting key risk reduction techniques.

Here I explore these limitations and suggest some solutions.

06 Mar 2015 — Jon Skinner

The dust has settled from the initial fall out from retail brokerages going out of business as a result of the SNB's abrupt removal of the CHF vs EUR peg several weeks ago.  

So I think it's time to ask a deeper question - does it make sense to use risk-based margins in retail FX proprietary trading?   After a quick review I can't see a good reason why not.

04 Mar 2015 — Jon Skinner
Risk magazine editor Duncan Wood makes a good point in his article The invisible incentives of clearing (subs. required) - the FSB / BIS ignored leverage ratio effects in concluding that incentives are in place for clearing both on banks self-clearing their trades and on FCMs clearing trades for clients.  In this post I look at the FCM capital cost problem and whether changes to bank capital rules alone can deliver an economically sustainable future for FCMs.
17 Feb 2015 — Sol Steinberg

For the second year in a row, President Obama is requesting a massive increase in funding for the CFTC. In his 2016 budget blueprint, the president seeks $322 million for the CFTC, a 29% increase from this year’s $250 million. The budget plan must still pass Congress, which will hold hearings soon. I doubt, however, that the entire amount will be approved.

04 Feb 2015 — Jon Skinner
Following January 2014's TABB Fixed Income conference: "BREAKING RATES", the Thursday January 29th TABB conference "PERFECT STORM NAVIGATING THE CONFLUENCE" held promise of answering the question of whether the market has dealt with the marked withdrawal of dealer market making capacity from the cash and derivatives markets in response to Basel III constraints.
13 Nov 2014 — Bill Hodgson

Statement from CFTC Commissioner J. Christopher Giancarlo