Derivs - Regulation

Deutsche Bank, its balance sheet and the market it operates in are worlds away from where major financial institutions stood in 2008 — so those scaremongering either have their own incentives for doing so or should know better.

The European Commission has approved, with some amendments, rules for collecting margin on uncleared derivatives, traversing a key hurdle as Europe seeks to catch up with Canada, Japan and the US.

Post-trade reporting of non-equity trades under MiFID II will be too onerous and expensive for single services, known as consolidated tape providers (CTPs), the European Securities and Markets Authority has said, suggesting instead that specialisations for a number of different instruments — including derivatives — be allowed.

ICE Clear Credit, the credit derivatives clearing unit of Intercontinental Exchange, has been recognised as a third-country (non-EU) central counterparty (CCP) under European rules.

The US Commodity Futures Trading Commission has expanded its interest rate swaps trading rules to require a range of additional products to be cleared through major central counterparties.

Preparing for MiFID II regulations will cost market participants over $2bn in 2017 in IT bills, a study by IHS Markit and Expand has found.

The European Commission could ignore the advice of the European Supervisory Authorities, and carry on carving out covered bond swaps from onerous collateral posting rules.

The London Stock Exchange this week moved to deflect a mounting list of European Commission concerns about its proposed merger with Deutsche Börse by saying it would consider selling off its LCH SA French clearing business.

Syndicated loans are becoming a focal point of firms looking to demonstrate the power of blockchain, or distributed ledger technology, with different initiatives ramping up and competing to solve the problem of lengthy settlement times in the private debt market.

Blockchain came sharply into focus this week for the derivatives market, as industry bodies warned on both the need for such technology and to regulate its use. Meanwhile, firms rolled out a range of new initiatives to address the market’s mounting challenges around margin and settlements.

The European Securities and Markets Authority has proposed making it mandatory to trade the iTraxx Europe and Crossover credit default swap indices on a regulated market or other recognised trading facility.

Synechron, a technology services provider, is targeting margin calls as one of six ‘blockchain accelerator’ applications for the financial markets.