Derivs - Regulation

The Committee of Securities Regulators has ruled out applying the so-called systemic internalizer regime to the trading of over-the-counter derivatives.

A recent proposed rule by the Securities and Exchange Commission implementing shareholder voting procedures on executive compensation packages will largely exclude lower-level employee bonuses, including derivative traders who on occasion make more than their executive bosses, according to lawyers in New York.

The Commodity Futures Trading Commission may have gotten ahead of itself in the race to implement the Dodd-Frank Act. That’s the view some attorneys, who point to the postponements of two planned rule votes by Chairman Gary Gensler. The latest was postponement of a rule on position limits yesterday morning.

The South Korean Financial Services Commission plans to enhance regulation on some aspects of over-the-counter and listed derivatives next year, including margin requirements, according to its recently-released 2011 Financial Policy Agenda.

Mandating daily portfolio reconciliation on swaps between financial entities would not raise costs for swap dealers and major swap participants, according to staff members from the Commodity Futures Trading Commission.

The International Accounting Standards Board is considering revamping how to account for changes in the liability of put options on shares held by non-controlling interest shareholders.

A proposed Hong Kong law that would define structured products as public offers rather than private placements is drawing cries that it would stifle growth in the market.

Securities and futures regulators should make it clear that annuities and other insurance contracts are not swaps and, therefore, not subject to being regulated as such, according to the Committee of Annuity Insurers.

Several industry associations have come out against the buy-in provision in the European Commission’s proposed regulation on short selling.

The long term focus of the recently announced over-the-counter derivative clearinghouse coming to the Hong Kong Exchange will be likely renminbi-denominated derivatives. That’s despite the fact the first products to be cleared will be interest rate swaps and non-deliverable forwards.

Smaller banks, retail investors and the growth in algorithmic trading have been the main drivers of the 20% increase in foreign exchange activity over the past three years, according to a report from the Bank for International Settlements.

A European Commission proposal to introduce a consolidated tape, or an integrated trade reporting system, for Europe across all financial instruments could have dealers lobbying strongly against it.