Derivs - Regulation

The International Swaps and Derivatives Association (ISDA) has warned that regulatory proposals for calculating derivatives contract exposure could lead to an uneven playing field and increased costs.

The Bank of England is rebooting a crisis-era tool for its banks. Firms will be able to use its liquidity facility in euros (LiFE) from next week, as central banks seek to avert a liquidity crunch in a no-deal Brexit scenario.

Representatives of the European Parliament and member states are aiming to reach a deal on Tuesday evening on a set of legal provisions that would make it more difficult for UK firms to provide investment services to Europeans.

The European Council on Tuesday confirmed its position on the review of the European system of financial supervision. It maintained that supervisors should not be funded by private firms, but agreed to give the European Securities and Markets Authority (ESMA) more power. But there is now a rush to find an agreement with the European Parliament before its members go on leave for May’s elections.

Industry body the Futures Industry Association (FIA) has submitted a lengthy letter to the Basel Committee for Banking Supervision (BCBS) lobbying for changes to the leverage ratio and how it interacts with derivatives clearing.

A large majority of derivatives users have not yet started to prepare contracts for the end of Libor, according to a survey published on Thursday.

Swedish markets regulator Finansinspektionen (FI) on Wednesday called for lawmaker-backed resolution plans for clearing houses, in the wake of a default at Nasdaq clearing last September.

The European Central Bank has said that its swap arrangement with the Bank of England, which would help financial firms access liquidity in a foreign currency, would not be affected if the UK leaves the EU with no deal.

The European Commission has finally confirmed that it will grant temporary equivalence to UK central counterparty clearing houses (CCPs) and central securities depositories (CSDs) in the event of a no deal Brexit.

European Union member states are set to soothe banks’ concerns about having too tight a window to change their risk-free euro reference rate from Eonia, with a postponement of the transition to Ester due on Wednesday.

The Bank for International Settlements has publish a research paper exploring the risks that spring from the close linkage between banks and clearing houses (CCPs) through OTC derivatives.

SEC chairman Jay Clayton warned the US Senate Committee on Banking about risks to US capital markets from Brexit, in a hearing conducted on Tuesday.