Derivs - Regulation

The European Commission plans to issue a directive to facilitate close-out netting throughout Europe, a triumph for the industry that would facilitate greater certainty for counterparties when entering into derivative transactions in the region.

Passing laws to require swap counterparties to report trade data to repositories will be key in order for emerging markets to gain the transparency sought by the G20, according to delegates at the Swiss Futures and Options 32nd Burgenstock Meeting in Interlaken, Switzerland.

The European equity options market is set to open up to high frequency trading in the coming year as a result of several factors including regulation, increasing competition between exchanges, and the merger between Eurex and NYSE Liffe, according to a report released by TABB Group today.

The Korea Exchange has been given until the end of 2012 to set up a central clearinghouse for Korean won-denominated interest rate swaps by the country’s Financial Services Commission, according to lawyers familiar with the process.

An attorney with Gibson, Dunn & Crutcher has urged the U.S. Securities and Exchange Commission to ease the registration process for security-based swaps issued by clearing agencies, should they fail to benefit from planned exemptions from the securities laws.

The International Swaps and Derivatives Association has warned Australian regulators about the potentially high price tag for setting up and running a domestic central clearing counterparty and the implications it may have for the wider market.

The Australian Council of Financial Regulators is considering pushing for a rapid deployment of a domestic central counterparty despite industry calls to slow the pace of legislation due to inconsistencies in the nation’s close-out netting regulations, according to market officials close to developments in the country.

The China National Association of Financial Market Institutional Investors’ is reportedly planning to require counterparties to start using its master agreement for all yuan-denominated derivatives contracts, including offshore CNH deals.

GFI Group has urged the Securities and Exchange Commission to broaden the planned exemption for security-based swaps (SBS) from parts of the securities laws.

An updated draft proposal for a revamped New Zealand securities law has been proposed by the country’s Financial Markets Authority that would allow the regulator to declare certain derivatives as securities and vice versa.

Futures firms and swaps market participants may be on the hook for big bucks to buy systems that record nearly all phone conversations their employees make, including those via cellphones, if a Commodity Futures Trading Commission plan takes effect.

The cost for entering derivatives with an Australian counterparty may go up if local regulators don’t further clarify close out netting legislation and bring it on par with English and American law, according to a recently submitted comment letter from the the International Swaps and Derivatives Association.