US Regulation: The Volcker Rule

Agencies Issue Final Rules Implementing the Volcker Rule

Five federal agencies on Tuesday issued final rules developed jointly to implement section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”). CFTC Press Release: Agencies Issue Final Rules Implementing the Volcker Rule.

Davis Polk: Explaining the Volcker Rule in 27 Pages

Normally, it’s not in the nature of law firms to oversimplify complex government regulations for their biggest customers. But Davis Polk & Wardwell LLP has decided to do just that for its mega-banking clients to start off the new year, giving them a handy, color-coded, “user-friendly” flow chart to help them navigate the Volcker rule, which restricts banks from making market bets with their own capital. Wall Street Journal: Davis Polk: Explaining the Volcker Rule in 27 Pages.

Thoughts on the Volcker Rule

Philip McBride Johnson gives his take on the Volcker Rule, which was agreed by regulators last week. Futures & Options World: Thoughts on the Volcker Rule.

US Regulation: The CFTC

 Mark Wetjen to Keep Top Seat Warm

The CFTC has unanimously voted to elect Mark Wetjen as acting Chairman, filling the leadership void posed by Gary Gensler’s 3rd January departure date. Regulatory Reform:  Mark Wetjen to Keep Top Seat Warm.

CFTC Chairman: Prepare for Mandatory SEF

Gary Gensler gave his last public speech as CFTC chairman.

• IFLR: CFTC Chairman: Prepare for Mandatory SEF
• Regulatory Reform: The King is Dead, the CFTC Limps On.

CFTC Guidance Means FIA-Isda Contract 'No Longer Needed'

Execution agreements that have taken years of work cannot be used on Sefs – and a big change is needed if they are to survive at all.

• Risk: CFTC Guidance Means FIA-Isda Contract 'No Longer Needed'
• Regulatory Reform: FIA-ISDA Cleared Derivatives Execution Agreement Living on Borrowed Time?

CFTC Issues Standards for Regulating U.S. Banks’ Overseas Swaps

The U.S. Commodity Futures Trading Commission agreed to defer to some overseas derivatives rules and left unresolved when many of its most important regulations will be imposed on foreign deals. Bloomberg Businessweek: CFTC Issues Standards for Regulating U.S. Banks’ Overseas Swaps.

DerivOne Outlook: CFTC in the New Year

As we begin the New Year, we wanted to provide an update on what to expect on the derivatives regulatory front in the near future, as well as to invite feedback from you on the notes you receive from Delta Strategy Group and the DerivOne Team at State Street. State Street: DerivOne Outlook: CFTC in the New Year.

A Path Forward for Prop Traders in the Swaps Market

The CFTC is great at sending emails out at inopportune times.  In this case it was the 13 no-action letters sent between December 20th and December 31th while most of the financial world was trying to take a deep breath and enjoy some time off. Kevin On The Street: A Path Forward for Prop Traders in the Swaps Market.

Happy New Year from the CFTC: Delays to Swaps Rules Contain Some Hidden Surprises

Big changes are happening at the CFTC:  With the departure of Gensler,and the swearing-in of acting Chairman Mark Wetjen, everyone knew that there would be a change of approach.  However, the scale and speed of that change has come as a surprise to many. RegTechFS: Happy New Year from the CFTC: Delays to Swaps Rules Contain Some Hidden Surprises.

Why Financial Markets Need Referees

Gary Gensler, outgoing chairman of the U.S. Commodity Futures Trading Commission, oversees a swaps market that is 25 times the size of the U.S. economy. The ire he’s garnered from Wall Street suggests that he has been effective in reining in deals that led to worldwide financial and economic collapse five years ago. Knowledge@Wharton: Why Financial Markets Need Referees.

Industry Welcomes Footnote 513 No-Action Extension

Industry sources have welcomed CFTC decision to extend no-action relief for its non-US swap dealer requirements and to consult on definitions. Risk: Industry Welcomes Footnote 513 No-Action Extension.

Other News in US Regulation

Fed Releases Final Swaps Push-Out Rule for Foreign Banks

The Federal Reserve completed a rule that gave foreign banks a chance to delay a Dodd-Frank Act requirement that they wall off derivatives trades from their U.S. branches. Bloomberg: Fed Releases Final Swaps Push-Out Rule for Foreign Banks.

The Future Comes Into Focus: A Conversation with ISDA Chairman Stephen O'Connor

In the face of a dramatically changing environment for over-the-counter derivatives, SmartBrief asked Stephen O'Connor, chairman of the International Swaps and Derivatives Association, to share insight on cross-border regulation, margin requirements and ISDA's role in the marketplace. SmartBrief: The Future Comes Into Focus: A Conversation with ISDA Chairman Stephen O'Connor.

Dodd-Frank Swaps Calendar

A calendar of important Dodd-Frank swap dates, continuously updated to include new dates, rules and releases.. Practical Law: Dodd-Frank Swaps Calendar.

Footnote 88- Contentious, Confusing, and Counter-Productive

ISDA has published a survey assessing market fragmentation and liquidity dissipation consequent upon confusion and uncertainty surrounding the controversial Footnote 88. Regulatory Reform: Footnote 88- Contentious, Confusing, and Counter-Productive

International Regulation

Important Steps Towards Completion of Post-Crisis Regulatory Reforms Endorsed by Group of Governors and Heads of Supervision

The GHOS today endorsed proposals from the Basel Committee on a common definition of the leverage ratio and changes to the Net Stable Funding Ratio, on which the Basel Committee will shortly commence consultation. BIS Press Release: Important Steps Towards Completion of Post-Crisis Regulatory Reforms Endorsed by Group of Governors and Heads of Supervision.

Derivatives Regulation in 2014: Turning Theory to Practice (Kind of)

Legal and technical issues still muddle regulatory compliance with derivatives regulation despite looming deadlines for both trading via SEFs in the US and trade reporting via TRs in Europe. Rob Daly explores these issues and what lies ahead for 2014. DerivSource: Derivatives Regulation in 2014: Turning Theory to Practice (Kind of).

Derivative Trading Rules Will Not Reduce Risk

The theory behind the post-crisis regulatory overhaul of derivatives trading is about to become practice, and concerns are growing that systemic risk will simply be transferred rather than backstopped. FT: Derivative Trading Rules Will Not Reduce Risk.

Die Fundamentale Bankenkritik der FAZ

Am Sonntag vor Weihnachten hatte die FAZ in ihrer Sonntagszeitung ein bemerkenswertes Bekenntnis, das es verdient hier noch einmal hervorgehoben zu werden. Man hat fast den Eindruck, die Autoren Rainer Hank und Winand von Petersdorff hätten sich in “Wie wir lernten, die Banken zu hassen” regelrecht in Rage geschrieben. Blick Log: Die Fundamentale Bankenkritik der FAZ.

The BIS Report Weighs in on Long-Term Trends in the Derivatives Market

The BIS released ”The OTC interest rate derivatives market in 2013” last week, authored by Jacob Gyntelberg and Christian Upper. There are some interesting things in the report on macro trends. The information is based on data from the Triennial Central Bank Survey. Securities Finance Monitor: The BIS Report Weighs in on Long-Term Trends in the Derivatives Market.

Substituted Compliance Determinations

Friday the CFTC approved comparability determinations for six jurisdictions (EU, Canada, Japan, Hong Kong, Australia, and Switzerland) for purposes of the cross-border application of Dodd-Frank. There were determinations for all six jurisdictions for entity-level requirements and for two jurisdictions for transaction-level requirements (EU and Japan). State Street: Substituted Compliance Determinations.

Australia to Receive Go-Ahead for CFTC Substituted Compliance

Australian market will broadly be able to follow domestic rules to comply with Dodd-Frank. Risk: Australia to Receive Go-Ahead for CFTC Substituted Compliance.

Canadian Regulators Ramp Up Reform of Derivatives Blamed in Financial Crisis

It’s been a busy week for Canadian regulators as they roll out new rules designed to meet global regulatory reform in the area of derivatives trading. Financial Post: Canadian Regulators Ramp Up Reform of Derivatives Blamed in Financial Crisis.

Basel Said to Be Weighing Leverage Ratio U-turn

Cash collateral may be allowed to bring down derivatives exposure – and repo treatments could also be softened, according to three industry sources. Risk: Basel Said to Be Weighing Leverage Ratio U-turn.

2014 – The Year Compliance Hits the Fan for the Energy Trading Industry

After several years of talking, negotiating, analysis and the introduction of a few new regulations, 2014 sees the arrival of some major new rule sets that will need to be met in the world of energy trading. CTRM Center: 2014 – The Year Compliance Hits the Fan for the Energy Trading Industry.

HMRC Excludes Client Clearing from UK Bank Levy

UK tax authorities exclude client collateral received as a result of clearing activities from bank levy, after complaints it would act as a disincentive to clearing. Risk: HMRC Excludes Client Clearing from UK Bank Levy.

Too-Big-to-Fail Problem Solved, Claim Leading Industry Figures

FDIC's single-point-of-entry method applauded but concerns still linger. Risk: Too-Big-to-Fail Problem Solved, Claim Leading Industry Figures.