European Regulation

Attached Document (see below)

SwapClear – Customer Protection – Your Options Under EMIR.

EMIR – And To Think That We Are Just Beginning……

After being heavily involved from the beginning in the lobbying over what became EMIR in Brussels, defending corporates’ use of derivatives for hedging, I thought that with the adoption of the Regulation and the Regulatory Technical Standards the biggest hurdles could have been behind us. Richard Raeburn's EACT Blog: EMIR – And To Think That We Are Just Beginning……

EMIR Supervisors College Process Has Teeth | Eurex Clearing Announces Authorisation Delay

Yesterday, Eurex informed interested parties via circular 029/2014 that the college of supervisors has yet to reach a joint opnion on Eurex Clearing's CCP application under EMIR. The OTC Space: EMIR Supervisors College Process Has Teeth | Eurex Clearing Announces Authorisation Delay.

Reporting, Reporting, and Yet More Reporting

While many European firms are still getting to grips with EMIR trade reporting and the headaches it’s caused, the next reporting challenge is already on the horizon in the form of MiFID/R. Finextra: Reporting, Reporting, and Yet More Reporting.

Insights into EMIR Trade Reporting

JWG co-hosted a webinar earlier this week, along with Banking Technology and the DTCC, examining the recently launched EMIR trade reporting regime. RegTechFS: Insights into EMIR Trade Reporting.

Annual EMIR Portfolio Reconciliation Day

EMIR requires that Non Financial Counterparties under the clearing threshold (NFC-) reconcile their portfolios of uncleared OTC trades once a year, for portfolios of 100 trades or less (quarterly otherwise). CTRM Center: Annual EMIR Portfolio Reconciliation Day.

Call for Reduced Large-In-Scale Threshold

Requirements for large-in-scale waivers for dark trading should be reduced to help counter the potential impact of dark pool caps on block trading, according to panelists at the FIX EMEA Conference in London. The Trade News: Call for Reduced Large-In-Scale Threshold.

Open Access in MiFID II Welcomed Despite Delays

The introduction of true competition in derivatives clearing will be positive for the industry, despite a lengthy time-scale for implementation that has attracted criticism, according to Charlotte Crosswell, CEO of derivatives exchange NLX. The Trade News: Open Access in MiFID II Welcomed Despite Delays.

Commission Publishes Rules for Fining TRs

On 13 March 2014, the EU Commission published a delegated regulation addressing the powers of the European Securities and Markets Authority (ESMA) to impose fines and penalties on trade repositories (TRs) under Article 64(7) of EMIR. DRS: Commission Publishes Rules for Fining TRs.

EU Council Looks to Make Love Not War Over SRM, Well Almost…

On 10 March 2014, the Presidency of the Council of the EU published a report on the EU Parliament’s proposed amendments to the regulation establishing the single resolution mechanism (SRM). DRS: EU Council Looks to Make Love Not War Over SRM, Well Almost…

BoE's Cunliffe Says Big Banks Are Still Too Big to Fail

The world's biggest banks still could not be dismantled safely, more than five years after the collapse of Lehman Brothers, the Bank of England's deputy governor for financial stability said on Monday. Reuters: BoE's Cunliffe Says Big Banks Are Still Too Big to Fail.

US Regulation

Inside a Half Second of Market Inefficiency

For 500 milliseconds, the spread in the SPY ETF became inverted, raising serious questions about the efficiency of our markets and the effectiveness of Reg NMS. Tabb Forum: Inside a Half Second of Market Inefficiency.

Inter-Affiliate Swap Clearing Relief Extended to December 31, 2014

The CFTC released two no-action letters, which together extend previously granted relief from mandatory swap clearing and exchange-trading requirements for certain inter-affiliate swaps. This relief expires on December 31, 2014. Practical Law: Inter-Affiliate Swap Clearing Relief Extended to December 31, 2014.

US Regulator Nears New FX Clearing Guidelines

BOCA RATON, Florida, March 13 (IFR) – The first CFTC guidelines for the mandatory clearing of foreign exchange derivative contracts are in the final drafting stages and could come as early as the next six weeks, according to market participants and one of the agency's commissioners. Reuters: US Regulator Nears New FX Clearing Guidelines.

DTCC Reporting Suit Proceeds – Should CFTC Concede? | Reuters Article

A judged trimmed DTCCs lawsuit against CFTC's determination on CME rule 1001 but allowed the core of the action to proceed, according to a Reuters article. The OTC Space: DTCC Reporting Suit Proceeds – Should CFTC Concede? | Reuters Article.

CFTC Staff Issues an Extension of Time-Limited No-Action Relief to Eurex Clearing

Washington, DC — The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Clearing and Risk (DCR) today issued an extension of time-limited no-action relief to Eurex Clearing AG (Eurex Clearing). CFTC Press Release: CFTC Staff Issues an Extension of Time-Limited No-Action Relief to Eurex Clearing.

CFTC to Japan- It’s Good to Talk

The CFTC has signed a Memorandum of Cooperation (MOC) with the Financial Services Agency of Japan. The MOC lays out the basis for the exchange of information for the supervision of regulated entities that operate cross-border between Japan and the U.S.  DRS: CFTC to Japan- It’s Good to Talk.

SEC to CFTC- Beware the Tortoise

Speaking before the AIMA Global Policy & Regulatory Forum last week, SEC Commissioner Michael Piwowar outlined the differences in approach between his own agency and the CFTC. DRS: SEC to CFTC- Beware the Tortoise.

Acting Chairman Mark Wetjen’s Keynote Address to the 39th Annual International Futures Industry Conference: The Necessity for Global Harmonized Derivatives Regulation

• CFTC Press Release: Acting Chairman Mark Wetjen’s Keynote Address to the 39th Annual International Futures Industry Conference: The Necessity for Global Harmonized Derivatives Regulation
• Automated Trader Commentary: Acting CFTC chairman touts success of substituted compliance, pledges more
• DRS Commentary: CFTC’s Wetjen: I’d like to teach the world to sing in perfect harmony.

Chilton Says He’ll Leave U.S. Swaps Overseer Next Week

Bart Chilton says he’ll leave the U.S. Commodity Futures Trading Commission next week after almost seven years of pushing for limits on oil and natural gas speculation, as well as curbs on algorithmic and high-frequency trading. Bloomberg: Chilton Says He’ll Leave U.S. Swaps Overseer Next Week.

CFTC Transaction Fee Gaining Traction – Wetjen

After several false starts in implementing alternative mechanisms to increase funding for chief US derivatives regulator the CFTC, acting chairman Mark Wetjen believes a proposed transaction fee on derivatives market participants may finally be gaining political traction. IFR: CFTC Transaction Fee Gaining Traction – Wetjen.

Commissioners Unhappy With CFTC No Action Letters

Several commissioners have spoken out over the CFTC’s no action letters, finding that many of them were instituted without leaving them enough time to give their own input into the matter. CFTC Law: Commissioners Unhappy With CFTC No Action Letters.

US Swaps Regulator Plans Trading Data Overhaul

The U.S. swaps regulator will outline its plan next week to clean up trading data, a top official said on Thursday, as it struggles to make the market less opaque after the credit crisis. The Commodity Futures Trading Commission, which was put in charge of the $630 trillion global off-exchange derivatives market after the crisis, may come up with a guidebook, or tweak its rules, one of its members told Reuters. Reuters: US Swaps Regulator Plans Trading Data Overhaul.

International & Mixed Regulation

7 Ways to Improve Regulatory Document Management

Financial institutions must prove that they are in compliance with all local and global regulations through evidentiary recordkeeping and document management that proves coverage across all regulatory frameworks. Here are seven document management best practices that may help institutions improve compliance coverage across the enterprise. Tabb Forum: 7 Ways to Improve Regulatory Document Management.

SCSA2 Set to Right the Wrongs of its Predecessor

In light of the difficulties which have plagued ISDA’s Standard Credit Support Annex (SCSA) (see this blog post for background), a successor, the SCSA2, is being drafted. DRS: SCSA2 Set to Right the Wrongs of its Predecessor.

Progress, of a Sort

Eight months on from the much-heralded “path forward” agreement that set a roadmap for how US and European regulators would deal with cross-border regulatory issues, the fruits of the new cooperative approach have started to emerge. ISDA DerivatiViews: Progress, of a Sort.

Does Basel III Create Buy Side Liquidity Risk? | IFR Article

IFR produced another article bemoaning the liquidity problems in the secondary credit bond market.  An illustrative stat. is bank inventory: 2007 US$235bn; now "a mere" US$37bn. The OTC Space: Does Basel III Create Buy Side Liquidity Risk? | IFR Article.

CFTC-EC Swaps Accord Not Working, Says MEP Swinburne

Trading platforms claim allowing US persons to trade on MTFs could subject non-US clients to US rules. Risk: CFTC-EC Swaps Accord Not Working, Says MEP Swinburne.

New Clearing Rules Vex Buyside Firms

With the passage of Dodd-Frank and other regulatory mandates, buyside firms have to focus on the clearing of over-the-counter derivatives. Combined with Dodd-Frank in the U.S. and Basel III and the European Markets Infrastructure Regulation in Europe, the challenges of clearing these trades are more complex than ever. Traders Magazine: New Clearing Rules Vex Buyside Firms.

Holes Expected in South Africa’s Draft Clearing Rules

Long-awaited clearing rules will arrive in draft form during March, dealers believe – but won’t say what firms are caught or when regime starts. Risk: Holes Expected in South Africa’s Draft Clearing Rules.

South African Corporates Expect to Sign CSAs

In a bid to bring down the cost of their hedges, power giant Eskom and South African Airways may sign collateral agreements with their dealers. Risk: South African Corporates Expect to Sign CSAs.

Trading

IRS Futures Won’t Gain Widespread Momentum

New interest rate swap (IRS) futures are failing to gain traction despite the lower margin incentive, according to Serge Marston, managing director, eCommerce sales, at Deutsche Bank. The Trade News: IRS Futures Won’t Gain Widespread Momentum.

No Trading Is Without Risk

Many people assume that the only way for high-frequency traders to make money day-in and day-out without losing is if the ‘game is rigged’ and their trades are without risk. But HFTs play by the same rules as everyone else, and no high-frequency trader makes money with every trade. Tabb Forum: No Trading Is Without Risk.

CFTC Confirms Bloomberg SEF’s MAT Determinations

On 10 March 2014, the CFTC confirmed the validity of the ‘made available to trade’ (MAT) determinations of Bloomberg SEF LLC made in January 2014.

• DRS: CFTC Confirms Bloomberg SEF’s MAT Determinations
• CFTC Press Release: CFTC Announces that Bloomberg SEF LLC’s Available-to-Trade Determinations Are Self-Certified.

SEF MAT Week 3, Volumes Up and Up

There have been a number of recent articles commenting on the lower volumes of USD Interest Rate Swaps, for example SEFVolumes died last week and US IRS Volumes-SEF MAT Cliff or Steady Decline. So now that 3 weeks have passed I decided to update my article SEF MAT Week One, What Does the Data Show. The OTC Space: SEF MAT Week 3, Volumes Up and Up.

SEF MAT Week 3 Numbers Hide Lack of Real Progress

Another week is in the books and last week US reported IRS volumes perked back up close to averages.  Drilling down does not flatter SEF progress however given off SEF volumes increased substantially more than on SEF and only USD SEF MAT volumes increased. The OTC Space: SEF MAT Week 3 Numbers Hide Lack of Real Progress.

SEFs Gather Momentum

Trading on swap execution facilities is beginning to gain traction in the third week of mandatory execution. Markets Media: SEFs Gather Momentum.

State Street on Why it is Taking on Futures Execution

DerivSource’s editor, Julia Schieffer, talked to Charley Cooper, senior managing director at State Street Global Exchange about why the custodian bank has expanded its FCM business to include futures execution and further deepen its footprint in traditional prime brokerage territory. DerivSource: State Street on Why it is Taking on Futures Execution.