Derivs - Regulation

The Reserve Bank of India is planning to require that all credit default swaps have rated underlyings because it believes CDS spreads alone should not be relied upon by investors. But some traders are unsure the ratings will be heeded.

Politicians in the European Parliament’s Economic and Monetary Affairs Committee are at odds over whether bank stakes in clearing houses should be capped or abolished.

Structured products professionals are preparing a menu of risks associated with marketing reverse convertibles. The move comes after the U.S. Financial Industry Regulatory Authority raised concerns about how they have been marketed.

Patrick Pearson, head of financial markets infrastructure within the European Commission's internal market division in Brussels, told Derivatives Week in an exclusive interview with London reporter Rob McGlinchey that the Commission is collecting data from dealers and end-users with a view to drawing up a benchmark of bid/ask spreads. The aim is to help shave users' hedging costs and determine how expensive it would be on top for users to clear their trades.

Amias Berman & Co., the fixed income advisory, origination and brokerage, is close to scoring a license from the U.S. Securities and Exchange Commission that will allow it to do business with U.S clients using an onshore broker’s license.

The U.K. Financial Services Authority is placing greater scrutiny on structured finance products as the market begins to stir back to life, and will veto any structures it considers too risky.

Gary Gensler, chairman of the Commodity Futures Trading Commission, today warned against allowing end-users of over-the-counter derivatives to be exempt from new regulations.

In an industry letter to the Federal Reserve Bank of New York, a group of 14 international dealers and their largest customers committed to new standards for transparency, standardization and collateral management, and to further expand the use of central clearing in credit and interest rate derivatives.

Structured credit products chalked up the biggest chunk of trading losses for investment banks in the U.K. over the financial crisis—more than 70% of the total against 13% for prop trading and 3.46% for equity derivatives.

The International Swaps and Derivatives Association and Bahrain’s International Islamic Financial Market today published the first master agreement for Shariah-compliant derivatives.

We've got Werner Langen’s draft policy paper on how to achieve an efficient, safe and sound derivatives market in Europe. It was released on Feb. 11 in German, but has just been translated into English. Langen is a member of the European Parliament for Germany and a member of the Committee on Economic and Monetary Affairs.

Malaysia was left relatively unscathed in the wake of the Lehman Brothers minibond debacle that hit other Asian nations, but Datuk Ranjit Ajit Singh, managing director of market supervision at the Securities Commission Malaysia still has plans to improve transparency in the nation’s financial markets.