Derivs - Regulation

U.S. Federal Reserve Chairman Ben Bernanke’s speech this week came as a poignant reminder that the Fed, whilst looking towards the future and how to begin the task of unwinding its easy monetary policy, is still in a wait-and-see mode.

Foreign currency collateral held against over-the-counter derivatives transactions should be exempt from a new levy on non-deposit foreign currency liabilities in South Korea, according to a letter from the International Swaps and Derivatives Association.

Japanese financial regulators are leaning towards requiring domestic institutions to clear yen-denominated interest rate swaps through an onshore clearinghouse.

Interoperability between clearinghouses will have to be driven by market developments rather than mandates by regulators, according to panelists speaking about the big picture of clearing at the International Derivatives Expo in London today.

Trade repositories will need to aggregate data in a way the U.S. Commodity Futures Trading Commission finds useful and is not overwhelming, the CFTC told the Association for Financial Markets in Europe in a recent meeting.

The requirement to centrally clear intra-group transactions will be a major burden for commodities firms that are global by nature, said speakers on the commodity derivatives regulation panel this morning at the International Derivatives Expo in London.

Martin Wheatley, the departing chief executive officer of the Hong Kong Securities and Futures Commission, said reform of the over-the-counter derivatives market would be a key challenge for his successor, but noted that Hong Kong was already ahead of many jurisdictions.

The Securities and Exchange Commission will delay its decision on whether to approve the Chicago Board Options Exchange’s SPXpm filing, a proposed new options offering structured off the Standard & Poor’s 500 Index.

Asia will provide a major opportunity for growth for derivative exchanges but significant challenges remain, noted exchange heads on a panel on exchange views at the FIA/FOA International Derivatives Expo in London this morning.

Mandatory clearing applied indiscriminately across markets will increase systemic risk, according to Alexander Justham, director of markets at the U.K. Financial Services Authority.

The Securities Industry and Financial Markets Association, the International Swaps and Derivatives Association and five other trade groups have asked the federal agencies charged with writing derivatives regulations to re-propose them.

The Securities and Exchange Board of India has announced that stock exchanges may introduce one or more schemes to enhance liquidity in their equity derivatives segments.