Derivs - Regulation

The European Commission is grappling with the issue of whether the European Securities and Markets Authority has the power to determine which over-the-counter derivatives must be centrally cleared.

The Brazilian federation of banks has started a trade information service that allows sellsiders to look up end user derivative positions before trading with them.

A group of dealers, buysiders and industry associations, including the International Swaps and Derivatives Association, have promised regulators they will publish new equity derivatives definitions in May and set up an equity determinations committee by mid-2012.

A week after approving the British clearinghouse LCH Clearnet to clear swaps for American mutual funds, the Securities and Exchange Commission has also given no- action relief to the Chicago Mercantile Exchange to do the same.

Brazil’s major derivative dealers plan to lobby the government to change registration requirements to eliminate repetitive charges for the registration of derivatives trades.

The Financial Industry Regulatory Authority has begun testing whether broker/dealers have followed guidance it laid out last year for appropriately advertising reverse convertible notes.

Dealers and securities firms in China are looking at ways to give offshore investors synthetic exposure to A-shares outside of the Qualified Foreign Institutional Investor scheme, which puts quotas on each QFII and limits offshore synthetic exposure to delta one and long only.

Structured products are set to arrive in Brazil, with recently passed legislation allowing foreign and local firms to structure and distribute to local investors. Regulators are hashing out the details on which type of products will be permitted and firms have started beefing up their operations.

Newedge is looking at the roles it might play once rules that follow the Dodd-Frank Act go into effect.

Mutual fund firms are concerned about the possibility of being held responsible for reporting derivatives transactions with non-U.S. counterparties, according to Leigh Fraser, partner with Ropes & Gray.

Corporates in China are starting to buy vanilla over-the-counter derivatives to hedge commodities and foreign exchange risk.

New regulations and developments including a central counterparty will make the over-the-counter derivatives and repo markets in Singapore more robust, Ng Nam Sin, assistant managing director at the Monetary Authority of Singapore said in a speech yesterday.