Derivs - Regulation

Negotiations between Greek government officials and its creditors for a debt swap deal have broken down over a failure to agree what the potential losses will be to bondholders.

Investors in Deutsche Börse and NYSE Euronext seem to be resigned to the merger of the two exchanges after E.U. antitrust officials urged the deal to be blocked, arguing that it would stifle market competition.

Hong Kong is likely to see more synthetic exchange-traded funds referencing commodities and fixed income this year. Firms are targeting the asset classes on the back of a lift from a spate of ETF approvals by the Securities and Futures Commission.

The U.K. Financial Services Authority is being pressed to not regulate structured product pricing by industry groups who argue there is no evidence to back intervention.

The full facts remain elusive but, according to the MF Global bankruptcy trustee, some USD1.2 billion may be missing from MF Global’s segregated customer account.

A proposed implementation of the Volcker Rule may have passed a Commodity Futures Trading Commission vote on Wednesday, but two Commissioners and a handful of market participants are questioning the timing and form of the proposals.

Yen-denominated interest rate swaps will be the first asset class to trade on the Japan’s planned electronic platform for over-the-counter derivatives when the system starts operating.

The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act in the summer of 2010 made an impact both in the U.S. and internationally. Dodd-Frank altered the landscape of the capital markets through an imposition of vast federal regulation.

Indian banks using over-the-counter derivatives will be hit with a credit value adjustment risk capital charge on top of the capital charge for counterparty default risk, under draft guidelines to implement draft Basel III proposals in the country.

The Financial Industry Regulatory Authority has launched a sweep looking at how broker/dealers handle spread-based structured products, giving compliance officers a warning that they need to make sure suitability, sales and training policies and procedures are up to scratch in this complex area.

Fragmentation of the Asian derivatives markets and the ability of end users and dealers in Europe and the U.S. to access them will be the main focal point of 2012, as local regulators press on with the establishment of clearinghouses and trade repositories.

The scope of Japan’s domestic clearing obligations should be limited to yen interest rate swaps based on LIBOR, basis swaps and credit default swaps on iTraxx Japan, according to the International Swaps and Derivatives Association.