Derivs - Regulation

South Korea’s Financial Services Commission is to revise rules over how hedge funds should calculate the potential maximum loss from derivatives trading.

CME Group plans to allow cross-margining across interest rate swaps and futures in the U.S. and between energy products in the U.S. and Europe.

Industry professionals in London are keeping close tabs on the European Union’s proposed European Markets Infrastructure Regulation, which could saddle securitizations with extra disclosures and reporting requirements.

The China Banking and Regulatory Commission is making marketing and selling financial products aimed at wealthy private individuals harder.

A proposal by the U.S. Commodity Futures Trading Commission that listed derivatives must have at least 85% of their markets traded through a central limit order books and a 15% by block trades may boost the over-the-counter derivatives market, according to futures industry leaders. Failure to meet those thresholds would lead to delisting.

Jurisdictional regulatory differences as well as product complexity will present U.S. clearinghouses with significant operational challenges in providing capital efficient clearing services to clients trading in the over-the-counter equity derivatives market especially, according to Amy Lawson, vice president at OCC, formerly known as the Options Clearing Corporation, on a panel at the Futures Industry Association's Options Expo 2011 in Chicago yesterday.

A tax on high-frequency trading in the U.S. is a bad idea, according to Terence Duffy, executive chairman of the CME Group on a panel at the Futures Industry Association’s Options Expo 2011 this morning.

Some countries will miss the Dec. 31, 2012 deadline for clearing and reporting to trade repositories all standardized over-the-counter derivatives set by G20 leaders in 2009, according to the Financial Stability Board.

The increasing prevalence of maker-taker pricing schemes in options markets, both exchange-traded and over-the-counter, will hurt exchanges and the market overall, said Jeffrey Sprecher, ceo of the InterContinental Exchange, on a panel at the Futures Industry Association Options Expo 2011 in Chicago today.

The debate over how to most efficiently segregate client collateral in the post-Dodd-Frank swaps market should be set to one side while the market works out other growing pains, said Craig Donohue, ceo of CME Group on a panel at the Futures Industry Association’s Options Expo in Chicago today.

A proposed Dodd-Frank Act rule requiring firms to post initial margin on uncleared over-the-counter interest rate derivatives could result in USD1.4 trillion in new capital charges, according to Paul Rowady, senior analyst at research and advisory firm TABB Group.

The Commodity Futures Trading Commission and Securities and Exchange Commission should do their best to align U.S. swaps regulations with those of overseas jurisdictions to avoid market disruption, according to MarkitSERV CEO Jeff Gooch.