Derivs - Regulation

Non-financial corporates could be forced to cut staff if they are not exempted from over-the-counter derivatives and capital requirement regulations in Europe, corporate treasurers are warning lawmakers.

Asian fund of funds manager, Gen2Partners, is widening the investing mandate of its flagship Explorers Fund.

The fight isn’t over on the U.S. Senate Financial Reform Bill, despite Republicans successfully blocking a vote on bringing the bill, which would bring sweeping restrictions to over-the-counter derivatives, to debate last night. Democrats will force two more votes today and tomorrow.

European politicians are proposing that firms pay the bulk of bonuses in subordinated debt and that the proposed European Banking Authority be given the authority to require firms to disclose bonus payments.

A key aspect of regulatory reform for the industry is that change is applied evenly across global markets to avoid regulatory arbitrage, according to players at the International Swaps and Derivatives Association’s annual general meeting this week.

Buysiders bemoaned the pressure being heaped on them to clear their over-the-counter contracts, noting that while in principle they believe in the benefits, such as improved portability of trades, in practice it is proving costly and disruptive.

The slew of proposed regulatory reform bills are not as bad as they could have been for the derivatives industry. That was a noticeable sentiment yesterday as industry heavyweights gathered at the International Swaps and Derivatives Association’s 25th AGM in San Francisco.

Sharon Bowles, chair of the European Parliament’s influential Economic and Monetary Affairs Committee, backs the International Monetary Fund’s proposed global levies on non-banks in G20 countries.

The Hong Kong Securities and Futures Commission is set to largely brush aside pleas from the market for restraint on its proposals on unlisted retail structured product regulation.

The stark divide between regulators and major derivatives dealers was palpable this morning at the International Swaps and Derivatives Association’s annual meeting in San Francisco, when ISDA officials’ comments clashed with those of Neal Wolin, deputy secretary of the U.S. Treasury.

Basel III proposals to increase capital charges for counterparty credit risk could give rise to unregulated entities such as hedge funds becoming market makers in the over-the-counter derivatives market, according to a report by Standard & Poor’s.

The British Bankers’ Association has called for the Committee of European Securities Regulators to follow the U.K.’s lead on over-the-counter derivatives reporting.