Derivs - Regulation

The U.S. House Financial Services Committee passed a revised bill today that would mandate both clearing for a significant chunk of over-the-counter derivatives and trading on exchange or electronic platforms—an about-face from the previous discussion draft.

A Basel Committee on Banking Supervision study released today estimates that pending changes to bank capital requirements will have the effect of requiring trading book reserves to be increased by two or three times. It doesn’t cover the impact of the changes on correlation trading portfolios, which will have an even larger impact on banks.

The U.S. House Financial Services Committee this morning passed a revised over-the-counter derivatives bill 43 votes to 26, with most Republicans opposed.

Korea's financial regulators have all but rejected the International Swaps and Derivatives Association’s call for the country to rethink its planned mandatory approval process for new instruments.

Jamie Dimon, chairman and ceo of JPMorgan Chase, said this morning on the company’s earnings call that he does not believe over-the-counter derivatives should be forced onto exchange because of the potential impact it would have on the markets.

Rep. Barney Frank (D-Mass.) and the U.S. House Financial Services Committee today debated a revised version of their over-the-counter derivatives reform bill that would require all swaps accepted by a regulated clearinghouse or exchange to be cleared—an about-face from the previous draft.

A trio of influential dealers—Credit Suisse, Goldman Sachs and JPMorgan—are causing ripples at the International Swaps and Derivatives Association. Their determination to shape regulatory reform in their favor has led to the departure of Greg Zerzan, head of global public policy.

The Austrian government is set to grant its Financial Market Authority greater power to police illegal trading activities, such as insider trading and miss-marking positions, and to review the systems firms have in place to monitor their exposures.

Martin Wheatley, ceo of the Hong Kong Securities and Futures Commission, reiterated his call for industry feedback on a set of reform proposals linked to unlisted structured retail products at an Allen & Overy conference yesterday.

Rep. Barney Frank (D-Mass.) is holding a hearing to mark up and amend his draft over-the-counter derivatives bill. After distributing some changes on Friday, he just announced an amendment that removes the ability of regulators to ban “abusive swaps.” Watch now to see what other amendments are added.

A group of Democrats from California have proposed a 1% state tax on all derivatives transactions as a way for the cash-strapped state to climb out of its financial black hole.

The over-the-counter derivatives bill by Rep. Collin Peterson (D-Minn.) is closer to the Obama administration’s earlier proposal, in what one derivatives lawyer called “a step backwards.” It may also have pressured Rep. Barney Frank (D-Mass.) to tighten up his proposal, which was seen as relatively favorable to the industry.