Derivs - Regulation

The US Commodity Futures Trading Commission (CFTC) has penalised Russia’s VTB Bank and its London-based VTB Capital investment banking subsidiary over what the Commission called "fictitious" and "non-competitive" block trades of Russian ruble/US dollar futures contracts.

Hong Kong’s Securities and Futures Commission has begun consultations with market participants over plans to grow its futures and options market by relaxing trading position limits for listed derivatives.

ICE Clear Europe, the European clearing arm of Intercontinental Exchange, has been authorised by the Bank of England and by the European Securities and Markets Authority as a central counterparty (CCP).

Industry-wide collaboration on distributed ledger technology governance is needed and policymakers must plan ahead for the impact of such advances on securities markets and post-trade infrastructures, The Depository Trust & Clearing Corporation has said.

Derivatives market participants must embrace new technologies to meet the challenges it faces in seeking greater standardisation and efficiency, the International Swaps and Derivatives Association has said. These include opportunities for use of blockchain, ‘RegTech’, product identifiers and ‘common domain models’.

Goldman Sachs has signed up many of its major dealer counterparties to new CSA documents for non-centrally cleared OTC derivatives in the last couple of weeks, using a Euroclear service to manage the collateral transfers. BAML, Barclays, Credit Suisse, HSBC, JP Morgan, Morgan Stanley and RBS are some of the firms that signed the new agreements with Goldman between September 2 and September 6.

IHS Markit will not overhaul the iTraxx Europe credit default swap index at the September roll next week to address UK bank debt regulations, say analysts, but the index operator will look at whether to change its rules in the near future.

The US Commodity Trading Futures Commission's split over whether to accept Japan's uncleared margin rules as equivalent to the US was not an ideal outcome. But the decision, however contentious, is a pragmatic step which will motivate further convergence between regulatory regimes.

The Financial Stability Board has singled out removing barriers to over-the-counter derivatives reporting as a priority for G20 leaders ahead of their summit in Hangzhou this weekend.

A requirement looming next week for major banks in the US to begin posting initial margin on uncleared swaps has prompted a chaotic scramble to comply with the deadline, said observers, while also elevating concerns about the preparedness of the rest of the market to meet future mandates. Dan Alderson reports.

UBS and three other banks are working together to apply blockchain technology to making payments and settling transactions in financial markets.

The International Swaps and Derivatives Association and PricewaterhouseCoopers were among those wading in with suggestions this week as regulators sought consultation on how best to install a framework to resolve failing central counterparties (CCPs).