EU regs: relief needed

Once again, regulators have kept European derivatives players on edge until the last minute, this month over the expected exemption of physically settled FX forwards from variation margin requirements. They need a break.

  • By Ross Lancaster
  • 30 Nov 2017
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First the positives. Unlike previous deadline scares, such as the wider implementation of variation margin requirements for non-cleared derivatives in March, regulators have publicly shown flexibility to market participants. A frustrating pattern was developing of harsh language about red lines followed by a more understanding approach in private consultation after deadlines had passed.

In this case, European authorities seem to have recognised that obliging non-financial entities to post variation margin on their FX forward positions is not practical. That is in line with market feedback and shows a more engaged tone than some of the EU's regulators have shown in the past.

But there are still frustrating traits to European derivatives regulation that have again reared up in this case. While communication to the market has improved, it is still unclear exactly who will receive an exemption. It is also unclear when the exemption will come.

For corporates, which are expected to receive the reprieve, the authorities’ public announcement has not yet given enough clarity to fully ease off repapering efforts. This is less than five weeks before the rule is scheduled to come into effect.

Once again, the lack of an equivalent to the no-action letter that US regulators are able to deploy is stark.

This clean mechanism for mitigating the market impact of new regulation is a necessity in the post-crisis world of lengthy new legislation. Europe should prioritise creating a version of its own.

  • By Ross Lancaster
  • 30 Nov 2017

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 132,006.56 495 7.94%
2 JPMorgan 122,596.38 503 7.38%
3 Bank of America Merrill Lynch 111,238.13 368 6.69%
4 Barclays 97,579.41 341 5.87%
5 Goldman Sachs 96,170.56 267 5.79%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 20,423.32 23 9.53%
2 SG Corporate & Investment Banking 14,215.71 38 6.63%
3 Deutsche Bank 13,118.70 35 6.12%
4 Bank of America Merrill Lynch 12,117.87 27 5.65%
5 Citi 11,366.88 31 5.30%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Goldman Sachs 5,620.72 26 10.21%
2 JPMorgan 4,354.18 22 7.91%
3 Citi 4,099.79 22 7.45%
4 Deutsche Bank 4,050.74 23 7.36%
5 UBS 2,368.08 8 4.30%