April 24, 2014

Weekly Roundup | Regulation & Trading | 22 April 2014

European Regulation

Six Ways Europe’s Financial Sector Is Meant to Mend Its Ways

What Michel Barnier, the EU commissioner responsible for financial services, dubbed a “rulemaking spring” is drawing to a close. FT: Six Ways Europe’s Financial Sector Is Meant to Mend Its Ways.


Will ESMA Cope With the EMIR Data Deluge?

ESMA has collected data for over two months now thanks to EMIR reporting. Many corporate treasurers doubt the data will ever serve a purpose, however. They recall a precedent in the US that shows regulation is a heavy burden with few tangible benefits. Euro Treasurer: Will ESMA Cope With the EMIR Data Deluge?


Super Tuesday for EU Bank Regulation

Europe’s biggest financial rulemaking spree since the creation of its single market more than 20 years ago reached its finale on Tuesday with the adoption of a slew of landmark reforms designed to make banks safer and financial markets more transparent. FT: Super Tuesday for EU Bank Regulation.


MiFID Enters Level Two Following Parliament Approval

The European Parliament passed updated rules for the Markets in Financial Instruments Directive, dubbed MiFID II, last night.


Firms Urged to Revisit EU Regulation Compliance

MiFID II introduces enhanced conduct of business requirements on financial services firms across Europe. FT Adviser: Firms Urged to Revisit EU Regulation Compliance.


Europe's Gentle Clampdown on Flash Boys

The European Parliament has adopted rules that, according to the Financial Times, add up to "the world's toughest clampdown" on high-frequency trading. Bloomberg View: Europe's Gentle Clampdown on Flash Boys.


Lawmakers Back High-Frequency Trade Curbs in EU Markets Law

High-frequency traders in the European Union are set to face some of the toughest rules in the world, after legislators backed rules that they said would curb volatility and make markets safer. Bloomberg: Lawmakers Back High-Frequency Trade Curbs in EU Markets Law.


European Parliament Passes “Sensible” MiFID II

The European Parliament has approved MiFID II, bringing to a close the political debate over the future of Europe’s trading infrastructure and ushering in a period of focus on finer technical details. The final vote will reflect a much more “sensible” approach than many had feared. Banking Technology: European Parliament Passes “Sensible” MiFID II.


Die Deutsche Kreditwirtschaft zu MiFID II Verabschiedung

Das Europäische Parlament hat heute die EU-Finanzmarktrichtlinie MiFID II verabschiedet, welche wesentliche Veränderungen für das Wertpapiergeschäft der Banken und Sparkassen mit sich bringen wird. VÖB: Die Deutsche Kreditwirtschaft zu MiFID II Verabschiedung.


Top 10 MiFIR Transaction Reporting Known Unknowns

When MiFIR is implemented in 2016, all of the pain experienced in preparing for EMIR’s transaction reporting regime, which went live earlier this year on 12 February, is likely to be rekindled. RegTechFS: Top 10 MiFIR Transaction Reporting Known Unknowns.


Any Port in a Storm?

With the European Parliament’s formal adoption of MiFID II in yesterday’s plenary session, the next fundamental industry overhaul is on the horizon. Regulation Matters: Any Port in a Storm?


Traders Watchful for Mifid II Detail

The European Parliament ratified on Tuesday the next wave of Mifid and effectively fired the starting gun on the introduction and implementation of the most ambitious piece of legislation in the history of the European markets. FOW: Traders Watchful for Mifid II Detail.


MiFiD II- The Real Work Begins

The European Parliament yesterday approved the April draft of MiFid II, effectively ending the political phase of its gestation. DRS: MiFiD II- The Real Work Begins.


It’s a Mad, Mad World

The EU Parliament has voted to adopt the Market Abuse Regulation, completing the MAD 2 legislative package. DRS: It’s a Mad, Mad World.



US Regulation

SEF Rules Inhibit Cross-Border Trades

Recent regulatory rulings have resulted in a shift in trading in euro- and U.S. dollar-denominated interest rate swaps. Markets Media: SEF Rules Inhibit Cross-Border Trades.


US Regulators to Monitor London Over-The-Counter Swaps

Part of London’s lucrative over-the-counter swaps market is set to come under direct US regulatory oversight as dealers in the UK capital wrestle with meeting tighter rules for overseas swaps dealers accessing US markets. FT: US Regulators to Monitor London Over-The-Counter Swaps.


CFTC Told EU Platforms Not to Seek Sef Equivalence

After realising an overhaul of its Sef-equivalence framework was needed, the CFTC told European platforms not to apply. At the same time, the FCA was working through rules with UK venues. Risk: CFTC Told EU Platforms Not to Seek Sef Equivalence.


US Eases Leverage Ratio Impact on Swaps

The US SLR eases the criteria for netting cash variation margin and derivatives exposures – boosting JP Morgan's ratio by up to 20bp – and European banks hope their own regulators will follow suit. Risk: US Eases Leverage Ratio Impact on Swaps.



International & Mixed Regulation

VÖB sieht keine Gefahr für Landesbanken bei EZB-Tests

Die EZB nimmt die größten Banken der Eurozone genau unter die Lupe. Manche Beobachter sehen dabei bei einigen deutschen Landesbanken Risiken. Doch die Chefin des Bundesverbandes öffentlicher Banken bleibt gelassen. Handelsblatt: VÖB sieht keine Gefahr für Landesbanken bei EZB-Tests.


Dealers Benefit from OTC Liquidity Split, Buy-siders Claim

Buy-side firms claim dealers stand to benefit from the division of OTC markets into US and non-US persons; all-to-all trading cannot exist until the break is closed. Risk: Dealers Benefit from OTC Liquidity Split, Buy-siders Claim.


Feedback to The FSB on Their Data Aggregation Consultation

The FSB published a consultation paper on the 4th of February entitiled "Feasibility study on approaches to aggregate OTC derivatives data" (source here at the FSB). Now the industry has digested this idea, some choice feedback has been provided, some selected pieces below. The OTC Space: Feedback to The FSB on Their Data Aggregation Consultation.


Regulatory Uncertainty is Keeping Life Interesting

March's New York conference and the annual OpRisk awards both reflect an industry coping with huge changes. Risk: Regulatory Uncertainty is Keeping Life Interesting.





'Flash Boys' in a Nutshell

The PR bluster around the new Michael Lewis book ‘Flash Boys’ is deliberately confusing, yet almost no-one seems to have read it. With the FBI investigating high-frequency trading (HFT), the issues that the book raises are clearly very serious. Finextra: 'Flash Boys' in a Nutshell.


Stiglitz on HFT

Joe Stiglitz presented a paper on HFT at the Atlanta Fed conference earlier this week that has received a lot of attention. The paper is worth reading, but I actually recommend Felix Salmon’s synopsis, which breaks out the issues nicely. Streetwise Professor: Stiglitz on HFT.


Barclays to Wind Down Commodities Trading

CNBC – Barclays, one of the world’s biggest commodities traders, is planning to exit large parts of its metals, agricultural and energy business in a move expected to be announced this week. CTRM Center: Barclays to Wind Down Commodities Trading.



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