Derivs - Regulation

The International Swaps and Derivatives Association has called for the European Commission to set out principles on how partial property transfers from failing banks will occur.

Swap execution facilities should not be forced to police position limit violations on their own systems, according to Phoenix Partners Group, the parent company of an interdealer for credit default swaps that intends to register as an SEF.

The Committee on Payment and Settlement Systems and the Technical Committee of the International Organization of Securities Commissions released a consultative report this morning asking market participants if central counterparties should be mandated to hold enough capital to cover the credit and liquidity risk of one or both counterparties in a given trade.

Deutsche Bank has reportedly suspended two senior equity derivative traders in Hong Kong.

Proposed Commodity Futures Trading Commission rules on portfolio reconciliation may a heavy burden if applied to certain international firms, specifically those in Asia, who have only recently begun the practice.

France’s Autorité de Contrôle Prudentiel, which regulates banks and insurance companies, has been quietly imposing stricter rules on regulatory capital trades over recent weeks.

Hong Kong regulators want to mandate that all locally-incorporated financial institutions report all OTC derivatives trades to the coming local trade repository in Hong Kong.

Firms that sell complex, risky products to retail investors should ensure their representatives are giving customers concrete, easy-to-grasp explanations of how such investments might operate under changing market conditions, according to Richard Ketchum, president and CEO of the Financial Industry Regulatory Authority.

Industry executives are pushing for transparency, including prioritizing the creation of data repositories, and tiered implementation for the swaps rules of the Dodd-Frank Act.

Nine of the 61 positions the Hong Kong Securities and Futures Commission hopes to add this fiscal year will be focused on structured products or derivatives, according to a budget presented to the Hong Kong Legislative Council on Monday morning.

Market participants should support efforts by the Securities and Exchange Commission and Financial Industry Regulatory Authority to implement consolidated audit trails for futures and options trading, said William Brodsky, ceo of Chicago Board Options Exchange at the exchange’s Risk Management Conference in Dana Point, Calif., earlier this week.

Members of the European Parliament yesterday aired concerns that exemptions to the European Market Infrastructure Regulation proposed by MEP Werner Langen would water down the legislation.