Derivs - Regulation

LCH.Clearnet’s global interest rate swap clearing platform, SwapClear, has launched a new blended compression service in response to a growing need for more efficient use of capital and reduced operational risk.

ForexClear, LCH.Clearnet’s fx clearing service, has expanded its range of clearable currencies to include the Peruvian nuevo sol in response to both member and client demand.

The Chicago Board Options Exchange is in talks with the Financial Industry Regulatory Authority regarding an agreement for FINRA to provide certain regulatory services to the CBOE and C2 options markets.

Overall credit default swap notional reported to swap data repositories last week increased 33% from the previous week, according to data form the International Swaps and Derivatives Association.

The over-the-counter Derivatives Regulators Group is looking at various approaches to resolve cross-border implementation issues, especially pertaining to organised trading platforms and how they can be regulated.

US regulation may mean investment managers that are operated and managed out of the US will have to constrict their trading to US counterparties, therefore introducing barriers to trading opportunities and hampering competition.

Calculating initial margin for uncleared over-the-counter derivatives is posing significant challenges for the industry and market participants need to look at adopting a standardised model to ensure consistency when calculating margin.

Swap documentation such as the International Swaps and Derivatives Association master agreements and credit support annexes — the contracts at the heart of so much wrangling between issuers and dealers in the supranational and agency bond market in recent years — are likely to be non-existent in the coming years for firms that only trade vanilla products. This is due to regulation that requires certain financial instruments to be cleared through central counterparty (CCP) clearing houses, writes Beth Shah.

The need for credit support annexes may be reduced due to regulation that requires some financial instruments to be cleared through clearinghouses and traded on swap execution facilities, according to market officials.

Hedge funds acting as clients of clearing members may delay clearing trades under the European Markets Infrastructure Regulation to allow the members to finanlise necessary documentation in a bid to save on costs.

The US Commodity Futures Trading Commission has issued an order filing and settling charges against broker-dealer Merrill Lynch for allegedly failing to diligently supervise its officers', employees', and agents' processing of futures exchange and clearing fees charged to its customers. The Commission’s order requires the firm pays a $1.2mn civil monetary penalty.

BM&FBOVESPA, Brazil’s sole bourse, has unified its four clearinghouses for different asset classes into one single platform, which began live operations Monday for exchange-traded and over-the-counter derivatives. The firm will now look to launch equities in 2015.