Derivs - Regulation

Taiwan’s Financial Supervisory Commission is rejecting offshore retail structured product applications that don’t offer watertight principal protection because of standard clauses allowing for early redemption at market rates.

The European Commission is starting to get feedback from the industry on proposals it put forward in February that would reform the way dealers and end-users account for their derivatives exposures.

The Depository Trust & Clearing Corp. has added a feature to its Trade Information Warehouse that shows a daily breakdown of its aggregated credit default swap contracts by their currency of denomination.

A group of Republican senators this afternoon introduced alternative language for derivatives reform.

Robert Pickel, executive vice chairman of the International Swaps and Derivatives Association, defended sovereign credit default swaps, calling them valuable hedging tools and saying they could increase liquidity in the underlying debt, during a testimony to the U.S. House of Representatives Financial Services Subcommittee on Capital Markets.

The U.S. Senate Financial Reform Bill may be some way from becoming law, but that hasn’t stopped attorneys from scouring every clause, looking for a loophole.

The People’s Bank of China is looking to issue a public notice giving the green light a trial test for banks in China to trade renminbi-denominated credit default swaps referencing onshore names.

Hope in the industry for more moderate over-the-counter derivatives reform has faded further on the announcement that Republicans will allow the Democrat-led U.S. Financial Reform Bill onto the Senate floor for debate without a bipartisan compromise on derivatives

Michel Barnier, commissioner for internal market and services at the European Commission, has reassured U.S. Treasury Secretary Timothy Geithner that Europe is committed to avoiding regulatory arbitrage in over-the-counter derivatives regulation, adding that the EC is working closely with the U.S. Commodity Futures Trading Commission on possible reforms.

The Commodity Futures Trading Commission has yet to approve a request, filed in January, from the Chicago Mercantile Exchange to begin trading futures on the S&P 500 Dividend Index.

Officials from Deutsche Bank and JPMorgan defended the use of sovereign credit default swaps by market makers and end-users.

Industry officials have warned lawmakers that requiring mandatory interoperability between clearing houses could create contagion risks in the market, something regulators and firms are striving to avoid.