Derivs - Regulation

The ban on uncovered sovereign credit default swap trading in Europe could permanently impair E.U.-regulated sovereign CDS markets and cause further market stress when combined with European Central Bank tapering, bank failure and lack of liquidity.

Market participants have returned to voice trading of swaps since swap execution facilities went live in the U.S. on Nov. 1, resulting in a drop in volumes on electronic trading platforms.

The Korea Exchange will encourage asset managers later this year to use volatility futures as underlyings for exchanged-traded products, such as exchange-traded funds or exchange-traded notes.

South Korea’s Financial Services Commission plans to impose sanctions in the form of fee assessments against parties involved in erroneous trading orders.

The Financial Conduct Authority will deal with breaches of the trade reporting mandate with a “proportionate response” after the start date for trade repository reporting of Feb. 12.

The Australian Securities and Investments Commission has accepted an enforceable undertaking from BNP Paribas in relation to potential alleged misconduct involving the country’s benchmark, the Australian Bank Bill Swap Rate.

Average daily volume in over-the-counter fx instruments in the U.S. in October 2013 totaled USD816 billion, 19% down on April 2013, according to results of a survey released by the Foreign Exchange Committee of the Federal Reserve Bank of New York.

The International Swaps and Derivatives Association has announced Thomson Reuters will take on the process for moving the USD benchmark rate to an automated, market-based ISDAFIX setting from today, marking the start of a two-phase transition to an automated rate.

The Joint Association Committee on retail structured products has reiterated its position on packaged retail investment products legislation ahead of what market participants are calling a “crucial juncture” in E.U. discussions this week.

The Australian Securities and Investments Commission is considering waiving specific trade reporting requirements for international firms active in the over-the-counter derivatives market, and is currently in discussions with market participants over the issue.

Officials in Seoul are skeptical moves by the country’s financial regulator to open the market to greater product diversity will boost dwindling derivatives volumes.

The issuance of structured products through a trust vehicle could be challenging for firms following the formal adoption of the Volcker Rule last month, according to lawyers.