European Regulation

ESMA Sheds Light on Supervision of TRs

The European Securities and Markets Authority (ESMA) has published a summary of its 2014 supervisory work plan in relation to EMIR trade repositories (TRs). DRS: ESMA Sheds Light on Supervision of TRs.

ATEL President Masquelier on the Pros and Cons of EMIR

Francois Masquelier, group treasurer and President of the Association of Corporate Treasurers in Luxembourg (ATEL), discusses EMIR and other upcoming regulatory challenges. Euro Treasurer: ATEL President Masquelier on the Pros and Cons of EMIR.

ESMA adds EuroCCP to list of authorised CCPs under EMIR

The European Securities and Markets Authority (ESMA) has updated its list of Central Counterparties (CCPs) that have been authorised to offer services and activities in the Union in accordance with the European Markets Infrastructure Regulation EMIR (EMIR). ESMA: ESMA adds EuroCCP to list of authorised CCPs under EMIR.

Another CCP Achieves Authorisation

ESMA announced that EuroCCP is now authorised under EMIR for equity products both OTC and on Exchange, the details of which can be seen on the ESMA website over here.

• The OTC Space: Another CCP Achieves Authorisation
• DRS: Next EMIR CCP Authorised.

Frontloading Requirement Bedevils Swaps Pricing

Major derivatives dealers are struggling to price interest rate swaps under an uncertain European regulatory regime, which began its countdown towards mandatory central clearing for over-the-counter derivatives last month. IFR: Frontloading Requirement Bedevils Swaps Pricing.

Esma Set to Neuter Emir Frontloading Rule

Esma will write to EC, say MEPs, outlining plans to set maturity threshold so high that no trades will be caught by controversial provisions. Risk: Esma Set to Neuter Emir Frontloading Rule.

EMIR Reporting Falls Short

Market participants are in a state of confusion because of the broad scope of Europe’s mandate for reporting over-the-counter swaps transactions to data repositories. IFR: EMIR Reporting Falls Short.

MiFID II to Calm the US HFT Storm?

While the US HFT debate rages and the FBI launches its investigations, Europe is quietly preparing to set a hard-hitting set of new rules for technical standards. RegTechFS: MiFID II to Calm the US HFT Storm?

Algo Flagging – the Future

Algo flagging is currently only the concern of direct members of German venues.  But it’s going to have a much broader application under MiFID / MiFIR and become of concern to the buy-side too. RegTechFS: Algo Flagging – the Future.

FCA Legislation Update

On 7 April 2014 the FCA published its policy development update for March 2014 (PDU 12) which details forthcoming FCA publications relating to a number of areas. DRS: FCA Legislation Update.

Last Minute Loss of Nerve Over TBTF?

The FT is reporting that a stand-off has developed over the EU bank recovery and resolution directive. DRS: Last Minute Loss of Nerve Over TBTF?

Thirteen Banks to Fight EU Derivatives Charges at May Hearing: Sources

Thirteen investment banks, including Citigroup, Goldman Sachs and Deutsche Bank, will fight EU charges of blocking exchanges' access to the credit derivatives market at a hearing next month, three people familiar with the matter said on Monday. Reuters: Thirteen Banks to Fight EU Derivatives Charges at May Hearing: Sources.

US Regulation

Energy Firms Beg CFTC for Clarity on Commodity Options

Utilities, oil producers and trading firms are urging the CFTC to issue clarification on contracts with embedded volumetric optionality. Risk: Energy Firms Beg CFTC for Clarity on Commodity Options.

Keynote Address by Commissioner Scott D. O’Malia, New Risk in Energy 2014: Energy Trading Risk and the Policy that Drives It

If it’s Worth Fixing, it’s Worth Fixing it Right – Thank you for the kind introduction and for the opportunity to serve as your opening keynote speaker. CFTC: Keynote Address by Commissioner Scott D. O’Malia, New Risk in Energy 2014: Energy Trading Risk and the Policy that Drives It.

CFTC Staff Issues an Extension of Time-Limited No-Action Relief to Futures Commission Merchants (FCMs)

Washington, DC – The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued an extension of time-limited no-action relief to FCMs. The extension of no-action relief will expire on June 30, 2014. CFTC: CFTC Staff Issues an Extension of Time-Limited No-Action Relief to Futures Commission Merchants (FCMs).

CFTC Seeks Public Comment on Request from ICE Clear Europe for Order Permitting Portfolio Margining of Futures and Foreign Futures Contracts

Washington, DC — The Commodity Futures Trading Commission (Commission) is requesting public comment on a petition submitted by ICE Clear Europe Limited (ICE Clear Europe) for an order pursuant to Section 4d(a) of the Commodity Exchange Act (Act). CFTC: CFTC Seeks Public Comment on Request from ICE Clear Europe for Order Permitting Portfolio Margining of Futures and Foreign Futures Contracts.

U.S. House Panel to Vote on Swaps Regulator Mandate

(Reuters) – U.S. lawmakers on Monday launched a bill to rewrite the rules of of the Commodity Futures Trading Commission (CFTC), giving more leeway to smaller players in the derivative markets it oversees. Reuters: U.S. House Panel to Vote on Swaps Regulator Mandate.

International & Mixed Regulation

CFTC Nears Cross-Border Clearing Framework

The CFTC is close to reaching a decision to adopt a substituted compliance framework for derivatives clearing organisations operating overseas, according to comments from the agency’s acting chairman and non-US clearers close to the regulatory discussions. IFR: CFTC Nears Cross-Border Clearing Framework.

Weekly Recap: Regulatory News on TRs, CCPs & Cross-Border

A quick recap of the week as there were quite a few regulatory announcements. DerivSource: Weekly Recap: Regulatory News on TRs, CCPs & Cross-Border.

OTC Derivative Reforms in Asia: Challenges Ahead

Celent analyst Arin Ray explores the challenges Asia faces as the region moves toward adopting the G20 mandates for standardizing the OTC derivatives market including extraterritoriality and fragmentation/concentration risks. DerivSource: OTC Derivative Reforms in Asia: Challenges Ahead.

Derivative Risk to Financial System Seen Easing in ISDA Survey

The threat posed to financial markets by derivatives has been curbed by regulators even as costs for investors have increased, according to an industry survey. Business Week: Derivative Risk to Financial System Seen Easing in ISDA Survey.

Trading

OTC Marketplace Takes Shape

The challenges of melding together the exchange-traded model and the traditional voice-traded OTC derivatives model have moved from the theoretical to the practical as swap execution facilities get underway. Markets Media: OTC Marketplace Takes Shape.

Maybe Markets are Unfair, But Are They Rigged?

The publication of Michael Lewis’s new book Flash Boys has reignited the whole HFT/dark pool debate (actually, maybe it’s never really gone away). The point people seem to continually miss in this debate is the distinction between “unfair” and “rigged”. Fidessa Fragmentation Index: Maybe Markets are Unfair, But Are They Rigged?

Ten HFT Debates to Follow on Twitter

The moment Flash Boys hit the shelves Twitter became a battleground for the HFT debate. #Flashboys #HFT Wall Street & Technology: Ten HFT Debates to Follow on Twitter.

Pinging: Who is the Predator, and Who Is the Prey?

The debate over Lewis’s Flash Boys is generating more informed commentary than the book itself. One thing that is emerging in the debate is the identity of the main contending parties: HFT vs. the Buy Side, mainly big institutional traders. Streetwise Professor: Pinging: Who is the Predator, and Who Is the Prey?

Michael Lewis’s HFT Book: More of a Dark Market Than a Lit One

Michael Lewis’s new book on HFT, Flash Boys, has been released, and has unleashed a huge controversy. Or put more accurately, it has added fuel to a controversy that has been burning for some time. Streetwise Professor: Michael Lewis’s HFT Book: More of a Dark Market Than a Lit One.

HFT- Here For Tomorrow?

Financial blogs and more mainstream media have been burning with comment over the last few days, though little light has been shed. DRS: HFT- Here For Tomorrow?

ICE Said Close to Start of Credit-Swap Futures That Mimic Index

IntercontinentalExchange Group Inc. (ICE), owner of the world’s largest credit-default swap clearinghouse, is close to offering futures on the most-active derivative indexes. Bloomberg: ICE Said Close to Start of Credit-Swap Futures That Mimic Index.

Algo Identifiers Galore

With the German algo ID mandatory from 1st April, I was prompted to scan the latest MiFID II texts in this regard. Member states must require exchanges to be able to identify the different algorithms used for generating orders (Art. 51.6) which, on a high level, sounds just like the German HFT Act. Regulation Matters: Algo Identifiers Galore.

Derivatives Trading via SEFs – What's Next?

DerivSource speaks to Sassan Danesh, Managing Partner, Etrading Software about how the volume of derivatives through SEFs will evolve now the initial hurdle has been crossed. DerivSource: Derivatives Trading via SEFs – What's Next?

OTC Derivatives Growing Pains

SEFs have introduced an entirely new workflow to the OTC trading environment, and it’s not without its issues. Growing pains must be addressed for this market to mature and grow. DerivAlert: OTC Derivatives Growing Pains.