Derivs - Regulation

Representatives from the Financial Services Agency of Japan and the European Securities and Markets Authority have signed a memorandum of co-operation related to clearing houses in Japan.

Overall interest rate derivatives trading that was reported to swap data repositories last week only decreased by 1% from the previous week, according to data from the International Swaps and Derivatives Association.

The public dissemination of swap transaction trade data in Ontario is raising fears that trades will be linked to specific firms, thus influencing transaction pricing and making it difficult for firms to hedge their risk, according to lawyers.

The limited number of central counterparties and over-the-counter clearing members in the UK is hampering competition. This could result in a monopolisation of services which may lead to a less resilient economy, according to feedback received by the Financial Conduct Authority.

Transaction reporting required by the Markets in Financial Instruments Directive can now be done by Bloomberg’s sellside trading solution, Trade Order Management Solutions, after it was rubber stamped by the Financial Conduct Authority to act as an Approved Reporting Mechanism on Thursday.

Market participants have welcomed the European Securities and Markets Authority’s decision to change its focus from collecting reported trade data to checking quality and access to regulators. This comes as EMSA believes there is more work to be done before collected data can be used to detect systemic risk.

Average pricing on orders executed on electronic trading venues could be the key to opening up a wider migration to central limit order books from the request-for-quote trading protocol, according to investors.

The European Commission has strengthened its stance on an exemption from clearing and collateral responsibilities for firms making intragroup interest rate derivative transactions with third country entities.

The investment that a central counterparty must make in a guarantee fund, also known as skin in the game, does not protect the end client, as larger CCP contributions to default funds increase concentration risk and encourage moral hazard, according to CME Group.

Overall interest rate derivatives trading that was reported to swap data repositories last week decreased by 36% from the previous week, according to data from the International Swaps and Derivatives Association.

The Australian Securities and Investments Commission has decided to reject a proposal that would require large foreign subsidiaries of Australian authorised deposit-taking institutions and Australian financial services licence holders to report their over-the-counter transactions to data repositories.

Asset managers in Europe are herding banks into providing ever longer clearing commitments. The decision by banks such as the Royal Bank of Scotland and BNY Mellon to shut down their clearing operations before the European clearing mandate kicks in has spooked some derivatives trading firms, who now want assurances that they’re jumping into bed with a dealer who will stick around. But delays to the clearing mandate make it only more likely more banks will withdraw from clearing, writes Hazel Sheffield.