Derivs - Regulation

The European Securities Markets Authority (ESMA) has said it doesn’t see a need to exclude for 30 months exchange traded derivatives from access to central counterparties (CCPs) and trading venues under the Markets in Financial Instruments Directive II, finding that their immediate inclusion doesn’t threaten financial stability.

Concerns about further delays to the finalisation of the Markets in Financial Instruments Directive II were raised this week, after communications between the European Commission and the European Securities Markets Authority (ESMA) appeared to have become strained.

In this round-up, China's cross-border trade settlement fell to a near three-year low in February, CME reports record levels of trading in its offshore RMB futures, RMB spot trading fell but swap trading surged on the Moscow Exchange, Singapore renewed its currency swap line, and Deutsche Bank sets up a the first interbank host-to host platform by a foreign bank in China. Plus, a recap of GlobalRMB's top stories this week.

In this round-up, Malaysia opens RMB qualified foreign institutional investor (RQFII) applications, Macau launches a RMB real time gross settlement (RTGS) payment system, China Construction Bank (CCB) will join the new London silver fix, and the Singapore Exchange (SGX) reported a strong start to RMB currency futures trading in 2016. Plus, a recap of GlobalRMB's top stories this week.

European Union regulators have published final draft rules for uncleared derivatives that make important concessions to lobbyists on margin requirements for some derivative contracts, but show no sign of budging on a very tight September 1 deadline for compliance by the biggest players in the market.

A merger between London Stock Exchange Group and Deutsche Börse could bring huge cost savings and margin benefits — but would concentrate clearing house risk, running directly against the regulatory desire to end "too big to fail".

The European Commission made the planned delay to the Markets in Financial Instruments Directive rules official on Wednesday, formally proposing an extra year before the rules need to come into force. The market had expected a delay, as regulators and market participants alike were set to miss the deadline to build and test technical systems.

Financial market regulators finally have something to cheer about, after a host of recent setbacks, as Europe and the US this week took a big step towards aligning their treatment of central counterparties (CCPs). But the move could also heighten competition for clearing banks in Europe.

Europe and the US have taken a big step towards cohesion on their treatment of central clearing counterparties (CCPs), with the European Commission and the Commodity Futures Trading Commission unveiling a common approach towards equivalence between the two CCP regimes.

A fight between the European Commission and the member states of the Union could allow the Markets in Financial Instruments Directive II to split into myriad national interpretations — a nightmare for those trying to implement the complex new rules.

The Basel Committee’s new trading book rules don’t force banks to split into subsidiaries or to ringfence capital. But they will still revolutionise how investment banks run their trading businesses.

In the last RMB round-up of 2015, HSBC became the first foreign bank to issue RMB-denominated CDs to corporates in China, Hungary plans RMB bonds in 2016 and Russian bank VTB saw a big boost to its RMB business in 2015. Plus, a recap of GlobalRMB’s top stories this week.