Derivs - Regulation

The Basel Committee has removed the maturity cap for credit exposures in the revised version of Basel III released today.

The European Structured Investment Products Association has released a set of principles governing how member firms issue, market, sell and trade structured products.

The European Securities and Markets Authority has asked for input on what topics in the European Market Infrastructure Regulation to prioritize in creating technical standards.

A new regulatory interpretation of Japanese law, along with what market officials say is a sound risk waterfall in the coming Japan over-the-counter derivatives central counterparty, has eased fears that members would have unlimited liability to the onshore clearinghouse.

The South Korea Financial Services Commission is requiring a basic deposit as an entry barrier to the equity-linked warrants market.

The capital valuation adjustment risk calculation being introduced for bank trading risks under Basel III would roughly double the counterparty risk charge, according to a senior risk manager in New York.

Firms selling constant maturity swaps spread ladder structures in Germany will have to up their disclosures to clients, including specific calculation formulas and the hedging processes involved. The tightening is a ruling by the Bundesgerichtshof, Germany’s federal court of justice.

None of the 19 banks fined by the Reserve Bank of India last month in relation to violations of derivatives law (DW, 4/27) will be forced to unwind any trades associated with those penalties, according to officials familiar with the violations.

“Important substantive differences” between derivatives regulation in the U.S. and other jurisdictions may put the U.S. at a competitive disadvantage, said Jill Sommers, a member of the U.S. Commodity Futures Trading Commission.

Sen. Jack Reed (D-R.I.) said there was no need to delay implementation of derivatives regulations for 18 months as approved by two House of Representatives committees.

A surge in hedging fx and interest-rate exposure has given a boost to the corporate derivatives business of banks in the Asia-Pacific.

The indemnification provision of the Dodd-Frank Act could undermine efforts to enhance transparency and mitigate systemic risk in the over-the-counter derivatives market, according to Larry Thompson, managing director and general counsel at the Depository Trust & Clearing Corp.