Derivs - Regulation

Hedge funds in Australia would have to disclose much more information about their derivatives use under a recently-floated consultation paper from the Australian Securities & Investments Commission.

Proposed regulations from the Department of Labor regarding the definition of fiduciary to ERISA plan assets could preclude swap dealers from transacting in over-the-counter swaps with ERISA plans, according to lawyers at Orrick, Herrington, & Sutcliffe in New York.

The latest versions of the European Parliament’s proposed rules on naked credit default swaps and short selling either remove the topic of buy-in entirely or limit its scope, marking a complete turnaround to previous legislative reports on the issue.

Provisions for trading with special entities, such as pension funds and municipalities, in the Dodd-Frank Act could conceivably be extended to hedge funds given they manage assets from those investors, say lawyers in New York and California.

Shyamala Gopinath, deputy governor of the Reserve Bank of India, has said that the central bank would be open to ideas on allowing offshore parties to hedge rupee exposure onshore, but spurned the notion of opening an onshore non-deliverable forward market.

A recently proposed rule by the Commodity Futures Trading Commission regarding the time allotted for the public dissemination of confirmation agreements after a trade is executed will likely spur a rise in the cost of operations for swap participants, according to lawyers in New York.

Firms may begin making arbitrage plays on the various renminbi options markets this year as the Hong Kong-based CNH options market continues to develop.

Banks who already hold a derivatives license in China will automatically be granted an ordinary license under new rules, according to a Chinese-language question and answer released by the China Banking Regulatory Commission.

Swaps counterparties would be blocked from using updated and improved valuation methods, under a proposal by the Commodity Futures Trading Commission. They’d also get locked in to prices on the swaps that reflect the mid-market point, not actual traded prices, say lawyers and advisors in New York.

U.K., Dutch and Nordic Members of the European Parliament will push for institutions for occupational retirement provision pension funds to be exempted from forthcoming derivatives legislation in Europe when they make parliamentary amendments over the next few days.

The Chinese State-Owned Assets Supervision and Administration Commission has imposed tight requirements for state-owned enterprise derivatives use, including a prior-approval requirement for any offshore commodity derivatives.

The Autorité des marchés financiers, France’s market regulator, has struck out on its own to propose broker-dealers and other market intermediaries give investors early notification about modifications slated to hit securitizations and derivatives, as well as provide investors with regular quarterly reports.