Derivs - Regulation

Approaches to applying prudent valuation requirements to trading positions, set out by the European Banking Authority under the draft capital requirements regulation, are unnecessarily prescriptive and formulaic, according to a number of trade associations.

The International Swaps and Derivatives Association, together with members in Japan and the Asia Pacific, are looking to update the equity Master Confirmation Agreements for index variance equity swaps used across the region.

The governance of the Euribor-European Banking Federation needs to improve, particularly in the structure of its steering committee, according to the European Securities and Markets Authority and the European Banking Authority.

The Singapore Exchange is looking at clearing Asian over-the-counter equity derivatives via its clearinghouse. It already clears some interest rate and commodity deals.

The European Securities and Markets Authority has sent a report to the European Parliament, European Council and European Commission that details the additional resources and staff that it requires to carry out its responsibilities under the European Market Infrastructure Regulation.

An International Swaps and Derivatives Association service allowing buysiders and sellsiders to amend and share ISDA Master Agreements to be in compliance with Dodd-Frank business conduct rules is seeing a pick-up from buysiders, Robert Pickel, ceo, told DI in an extensive interview.

On Nov. 16 the Department of the Treasury issued a determination that foreign exchange swaps and fx forwards should not be regulated under the Commodity Exchange Act and therefore should be exempted from the definition of swap under the CEA as amended by the Dodd Frank Wall Street Reform and Consumer Protection Act. The Determination is a wholesale adoption of the proposed determination issued by the Treasury last year and took effect immediately.

The European Securities and Markets Authorities has published guidelines stating that a national competent authority should assess and ensure that a central counterparty has put in place a framework to identify, monitor and manage potential risks arising from interoperability arrangements.

The Philippine Securities and Exchange Commission is looking at creating an equity-linked derivative to ensure continued foreign investment in the country.

The Swiss Financial Market Supervisory Authority has ordered UBS to improve processes and controls for the submission of interest rates data for benchmarks. This comes after UBS was fined approximately USD1.5 billion by U.S., U.K., and Swiss regulators for attempting to manipulate the London interbank lending rate and other interest rate benchmarks.

The Australian Securities and Investments Commission has released regulatory guidance for domestic and overseas clearing and settlement providers wanting to operate within the domestic Australian market.

Regulatory proposals for initial margin requirements for non-centrally cleared derivatives will severely impact liquidity and could increase systemic risk, according to trade associations.