Derivs - Regulation

The European Commission is expected to suggest capital relief for banks that use central clearing for credit derivatives when it responds this Wednesday to the Jacques de Larosière report on financial supervision.

The introduction of sweeping changes to credit default swap contracts in North America, set to take place by the March 20 roll into series 12 of the CDX indices, has been pushed back to April 8.

Taiwan’s Financial Supervisory Commission on Friday asked domestic trust banks to consider stopping marketing efforts on structured products until a new set of regulations governing the industry go into effect.

JPMorgan has created a group to deal with over-the-counter derivative servicing and is in the process of filling some staff positions.

A proposed offering from The Bank Of New York Mellon that intends to simplify end-of-day derivatives collateral transactions via netting is getting a cautiously optimistic reception from some major dealers.

Credit default swaps on SLM Corp., commonly known as Sallie Mae, gapped out to 25 points upfront from 14 points earlier today on concern that U.S. President Barack Obama’s budget proposals will halt subsidies for student loan providers.

A bill proposed earlier this month by U.S. Rep. Peter DeFazio (D-Ore.) could force dealers to pay an excise tax on the sale and purchase of options, drastically increasing trading costs.

Noteholders of a Lehman Brothers residential mortgage-backed securities deal are today meeting to decide with the issuer whether to terminate a swap agreement with the fallen firm and whether to file claims against it for missed swap payments.

A bevy of Street firms has formed a coalition to fight criticism related to credit default swap trading— which has been tagged by some observers as a major contributor to the financial crisis.

Multiple central counterparties for clearing credit default swaps are not a good idea. That’s according to research from Darrell Duffie, a finance professor at Stanford University, and PhD student Haoxiang Zhu, who also argue central clearing of only one type of instrument will bring about severe challenges when netting off exposures.

The International Swaps and Derivatives Association has all but completed a set of protocols allowing counterparties currently using the close-out approach for early contract termination in the 1992 Master Agreement to be bound instead by the 2002 methodology.

Credit default swaps on the U.K. widened after the nation’s Office for National Statistics yesterday classified Lloyds Banking Group and the Royal Bank Of Scotland as public sector entities, shifting an estimated GBP1-1.5 trillion (USD1.44-2.16 billion) in liabilities to the British taxpayer.