Derivs - Regulation

The Nigerian Securities and Exchange Commission has called on the International Swaps and Derivatives Association to help craft derivatives legislation following a surge in trade volume over the past year.

The Lehman Brothers estate will fight what it says are inflated derivatives claims filed by big banks, the firm’s administrators said in U.S. bankruptcy court this morning.

An auction mechanism that would standardize how credit derivative tranche trades are settled when a company within the tranche restructures its debt is being formulated. The so-called Tiny Bang restructuring supplement follows Small Bang and Big Bang protocols introduced earlier this year and would primarily affect iTraxx trades in Europe.

The U.S. financial reform bill introduced last week by Sen. Chris Dodd (D-Conn.) excluded a controversial proposal that would have limited the stakes dealers can hold in derivatives clearing houses.

The People’s Bank of China is looking to regulate interbank over-the-counter derivatives.

Sen. Maria Cantwell (D-Wash.) proposed a bill yesterday that would repeal the provision of the Commodity Futures Modernization Act of 2000 that exempted over-the-counter derivatives from state gambling and bucket shop laws.

The notional amount of single name and index credit default swaps outstanding globally for the first half of 2009 was USD36 trillion, 14% less than what was recorded for July to Dec. 2008, according to an update from the Bank of International Settlements.

The leading contender in Japan for clearing over-the-counter derivatives has suffered a series of setbacks, forcing a progress report that was due in October from the Tokyo Stock Exchange to be pushed back at least two months.

Sen. Chris Dodd (D-Conn.)’s financial reform proposal, released today, would force alternative swap execution facilities to make public timely information on over-the-counter derivatives pricing and trading volumes.

The U.K. Financial Services Authority today said it should be up to European exchanges, not regulators, to decide which over-the-counter derivatives are eligible for central clearing.

Firms who trade over-the-counter derivatives hit out at the lack of clarity from regulators at the Futures and Options World derivatives conference in London this morning.

Retail customers of Meteor Asset Management could lose millions on soured Lehman Brothers-linked investments after the U.K. Financial Services Authority this morning declared that the structured product providers’ marketing practices met its standards and it will not need to offer compensation.