Derivs - Regulation

Collateralized debt obligation structurers are likely to think twice before using swap counterparties in different jurisdictions after a U.K. Court of Appeal ruling on a CDO called Dante this morning.

Adam Glass, a partner specializing in structured finance and derivatives at Linklaters in New York, is set to join the Securities and Exchange Commission’s new division of risk, strategy and financial innovation.

Industry officials in the U.K. and Sweden are setting up retail structured products associations.

As Chris Dodd, chairman of the U.S. Senate Banking Committee, prepares his over-the-counter derivatives bill for release next week, Sen. Maria Cantwell (D-Wash.) is considering drafting one of her own.

Russia’s Federal Financial Markets Service has offered a Parliamentary bill to legalize close-out netting for derivatives along existing International Swaps and Derivatives Association guidelines.

A group of buysiders and sellsiders is working on documentation to allow users to clear over-the-counter derivatives through dealer members of CME Clearing.

Some industry officials believe a last-minute amendment to the House Agriculture Committee derivatives bill allowing trading through so-called ‘confirmation facilities’ may give dealers the freedom to trade as they do currently.

Central and Eastern European exchanges are promising to slash costs and offer new services to over-the-counter users in a bid to attract more trades onto exchange.

Regulators and industry officials in Poland are urging firms to set up a regional clearing house for over-the-counter credit, equity and currency derivatives in Central and Eastern Europe.

As over-the-counter derivatives pros debate the dangers of CME Clearing and ICE Trust not achieving interoperability—where CCPs face each other, allowing customers to choose where they clear trades—Kim Taylor, president of CME Clearing, said she is open to the idea conceptually, but troubled by the potential risks.

The final draft of derivatives legislation from the U.S. House of Representatives will likely emerge as part of an omnibus bill addressing all of the Obama administration’s financial reform goals, which could improve its chances of eventual passage.

A tax bill introduced in Congress on Tuesday could force foreign firms to pay withholding taxes on dividend swaps on U.S. stocks, even if taxes have already been paid on the underlying dividends.