Derivs - Regulation

Regulators implementing the use of central clearinghouses in the over-the-counter derivatives market need to pay attention to the potential pitfalls of CCPs being domiciled in different regulatory jurisdictions, according to an International Swaps and Derivatives Association discussion paper published today.

A reduction in the supply of long-term government debt could force buysiders to turn to derivatives or riskier alternatives, according to the Bank of International Settlements’ Committee on the Global Financial System.

Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, said a reporting rule designed to collect data on swaps positions may be among the first over-the-counter derivatives regulations to be implemented.

U.S. regulators need to clarify proposed anti-disruptive trading practices rules to ensure that they are not duplicative with existing laws.

The Commodity Futures Trading Commission should leave it to swap execution facilities and designated contract markets to police for market disruptions barred by the Dodd-Frank Act, according to the Managed Funds Association.

The Securities and Exchange Commission is still “a ways off” from figuring out what conditions need to be in place to require mandatory trading and clearing of security-based swaps, according to John Ramsay, deputy director of the Division of Trading and Markets.

The Malaysia Securities Commission is looking to hire three experts to oversee the approval process for investment products, including structured products, with varying levels of experience.

New York members of Congress have sent letters to the Federal Reserve, the Commodity Futures Trading Commission and other regulators, warning that new derivatives regulations related to the Dodd-Frank Act would put U.S. banks at a “significant competitive disadvantage.”

Three foreign banks and one domestic Chinese bank have received approval from Chinese regulators to trade in the nascent onshore yuan options market, according to the China Foreign Exchange Trade Center.

The Securities and Exchange Board of India has pushed back the deadline from May 7 to August 7 for more detailed foreign institutional investors reporting on offshore derivatives and participatory notes written on Indian underlyings.

Andrew Lamb is ceo of CME Clearing Europe in London, with responsibilities including having oversight of the clearinghouse’s risk management and its day-to-day operations. He spoke to Senior Reporter Olivia Thetgyi on the clearinghouse’s plans to develop its business in the region and regulatory developments in the E.U.

CME Group is looking to cross-margin between its U.S. and European clearinghouses, allowing offsetting positions to reduce margins for clearing firms.