May 21, 2014
Weekly Roundup | Clearing and Regulation | 21 May 2014
Steven Maijoor the Chair of ESMA has written a letter to Michel Barnier at the European Commission suggesting a new approach to handling the period between a CCP being authorised and any mandated clearing. Previous coverage of the front loading issue by Jon Skinner is on the site here for background reading.
Banks would not have to clear some of their derivatives transactions during the roll out of new rules aimed at making markets safer under a proposal put forth by a top European Union regulator on Thursday.
The European Commission adopted on 4th July 2012 nine regulatory and implementing technical standards to complement the obligations defined under the Regulation on OTC derivatives, central counter-parties (CCPs) and trade repositories, which constitute the so-called European Markets Infrastructure Regulation (i.e. EMIR) and have been developed by the European Supervisory Authorities.
Founding banks no longer have 'powers of direction', which could have big implications for competition in Europe's interest rate derivatives market.
A template for agreeing principal-to-principal client clearing for European derivatives trades has been published by the International Swaps and Derivatives Association (ISDA) and the Futures Industry Association (FIA) Europe. The ISDA/FIA Europe Cleared Derivatives Execution Agreement is a template document designed to assist market participants when negotiating execution agreements under English law for swaps intended to be cleared by central counterparties outside the US.
The European Parliament has finally voted its support for the heavily negotiated new version of the Markets in Financial Instruments Directive (MiFID). While one of its most controversial goals — establishing a central source of post-trade prices from regulated markets — is still an important piece of its vision, there is still too much to be resolved before a real launch of a consolidated tape can come to fruition.
The Commodity Futures Trading Commission is reviewing U.S. banks' steps to restructure overseas swap trading as part of an examination of whether the companies might be evading Dodd-Frank Act rules. The agency's staff is gathering information about any changes banks have made to derivatives contracts or their corporate structures seeking to free themselves from the law's restrictions, Mark P. Wetjen, the agency’s acting chairman, told reporters yesterday after a Senate hearing in Washington.
Speaking before the Senate Appropriations Subcommittee on Financial Services and General Government, CFTC acting-Chairman Mark Wetjen used the rare tactic of honesty in his appeal for extra funding in 2015. "The unfortunate reality is that, at current funding levels, the Commission is unable to adequately fulfill the mission given to it by Congress."
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