Derivs - Regulation

Alternative proposals in Europe for non-equity pre-trade transparency in the Markets in Financial Instruments Directive II will be considered, although it is too early to say what form such rules will take, according to Markus Ferber, Member of the European Parliament, who is heading up MiFID for the Parliament’s Economic and Monetary Affairs Committee.

Clearing members could be exposed to substantial liquidity risk between different central counterparties in distressed market situations, if the current margin system for central clearing applies to clearable derivatives, according to the International Swaps and Derivatives Association. Some regulatory officials aren’t buying the argument though.

If credit default swaps aren’t triggered on Greek debt, the sovereign CDS market will likely break down, according to Nick Pierce, head of fixed income in Europe at Vanguard.

The potential for regulatory arbitrage over margins for contracts that are not centrally cleared, such as fx derivatives in the U.S., is a serious issue, according to Steven Maijoor, chair of the European Securities and Markets Authority.

­Members of the European parliament are undecided over the makeup of a potential E.U. financial transaction tax and whether it would benefit or damage the economy.

Harry Krkalo, an executive director in equity derivative and structured product sales at Morgan Stanley in Singapore, has left the firm and joined ANZ.

Global dealers operating in Indonesia are fretting over a currency law that could force them to settle non-cash over-the-counter derivative transactions in rupiah, sidelining contracts that stipulate other foreign currencies.

UCITS exchange traded funds should use identifiers in their name, fund rules, prospectus and key investor information document when being marketed to investors, according to the latest consultation document from the European Securities and Markets Authority.

An International Accounting Standards Board review of credit risk hedge accounting standards for credit derivatives will likely make it easier for firms to account for credit default swaps in Japan.

Pension funds, insurance companies and asset managers face the largest increases in fx cash and derivative transaction costs should a financial transaction tax be implemented in Europe.

Dealers and end users in South Korea are becoming concerned that the Korea Exchange has not yet addressed legal issues underlying the establishment of the country’s domestic over-the-counter central clearing counterparty, according to lawyers.

The Edhec-Risk Institute has warned against placing distinctions between physical and synthetic exchange traded funds, and has also criticized Blackrock for having different positions with U.S. and European regulators in respect to the use of derivatives in ETFs.