Derivs - Interest Rate

Clearing houses, lawyers and derivatives specialists have spent this week poring over Europe’s proposed rules for central counterparty recovery and resolution, with question marks still hanging over how each case will be assessed and how banks should capitalise their exposures.

CME Clearing Europe, CME Group’s London-based clearing house, has been approved by the US Commodity Futures Trading Commission as a derivatives clearing organisation (DCO).

The European Commission has proposed rules aimed at minimising the systemic risk of recovering and resolving central counterparties that fail, including granting authorities powers to intervene, having projected that 70% of the $500tr over-the-counter derivatives market will move to being cleared.

The International Swaps and Derivatives Association and IHS Markit have unveiled the ISDA 2016 Variation Margin Protocol, which automates amending collateral documents or setting up agreements to comply with variation margin requirements from March 1.

The European Commission is set to unveil a draft regulation next week aimed at ensuring that central counterparties which fail are resolved in an orderly manner.

A new swathe of asset managers will be caught by rules on how they use benchmarks, after the European Securities and Markets Authority broadened its planned clampdown.

trueEX, the interest rate swap trading platform, has broadened its push in the asset class with a new facility for trading, processing and novation of non-cleared contracts.

ICAP has named a head of post-trade product client development.

Intercontinental Exchange has added Goldman Sachs as the third clearing member of its ICE Clear Netherlands subsidiary.

Derivatives experts are rushing out a new toolkit of products to help market participants navigate a coming sea change in financial markets following last week’s US presidential election upset. Dan Alderson reports.

Bankers have lauded a decision by the European Securities and Markets Authority this week to propose a two year delay to rules requiring smaller financial counterparties to centrally clear derivatives trades.

A big rift in US volatility trading has opened in the week since Donald Trump’s shock presidential election win, with equity markets quickly calming after the result while the US Treasury yield curve sharply steepened.