Derivs - Regulation

Clearing regulation will make credit derivatives less viable trading instruments for funds, according to Valentijn van Nieuwenhuijzen, head of strategy at ING Investment Management in Amsterdam.

Regulatory requirements for buysiders in regard to bunched orders is deterring some investors from trading on swap execution facilities, according to Richard McVey, chairman and ceo of MarketAxess, told attendees at the at the Wholesale Markets Brokers' Association's SEFCON IV conference at the Grand Hyatt Hotel in New York on Monday.

Varying regulation in different jurisdictions is going to result in fragmentation and the potential for regional markets, according to speakers at the Wholesale Markets Brokers' Association's SEFCON IV conference at the Grand Hyatt Hotel in New York yesterday.

The European Securities and Markets Authority has called on firms to be more transparent in disclosing its credit risk when publishing information on the use of credit derivatives in financial statements. The regulator is therefore requesting greater disclosures when reporting under International Financial Reporting Standards and in the forthcoming Asset Quality Review.

The International Swaps and Derivatives Association has released a pre-publication draft of changes to its credit event definitions. The draft follows proposed amendments to the original 2003 definitions were released in July.

The Singapore Exchange is looking to refine how its central counterparty operates during a default. The exchange is proposing changes to improve the auction process for managing a default.

South Korea’s tax regime is disadvantaging local issuers of synthetic exchange-traded funds, as ETFs listed offshore and invested in by Korean investors are not subject to the country’s full range of taxation.

European trade repositories are calling for the European Securities and Markets Authority to set down guidelines on global legal entity identifiers, or LEIs, ahead of trade repository reporting going live in February.

There are three main components to the European Market Infrastructure Regulation: risk management requirements for OTC derivatives that are not centrally cleared; central clearing of certain OTC derivatives, together with a harmonized framework of clearing within Europe; and reporting of all derivatives to trade repositories.

The communiqué from China’s Third Plenum of the 18th Party Congress lacks clarity on market reforms, despite the meeting openly committing the country to a market driven economy, according to market officials.

The Singapore Exchange is looking to refine how its central counterparty operates during a default and is proposing changes to improve the auction process for managing a defaulting over-the-counter derivative contract.

Regulatory burdens such as authorization for central counterparty clearinghouses are likely to hinder the launch of new products in Europe, noted Trevor Spanner, ceo of LME Clear, speaking at the 29th Annual Futures & Options Expo in Chicago.