Derivs - Regulation

Mandatory clearing in Japan has expanded the pool of counterparties in interest rate swaps and boosted liquidity as a result.

The Hong Kong Monetary Authority is expected to keep the Hong Kong dollar pegged to the U.S. dollar, despite recent inflows strengthening the currency and moving it close to its upper barrier, according to fx traders.

Banks will be required to hold more capital against exposures to central counterparties should a draft regulation from the European Commission be enacted.

The British Bankers’ Association is proposing discontinuing nine tenors and five currencies in the London interbank offered rate framework, along with the sterling repurchase agreement benchmark.

The Markets in Financial Instruments Directive could restrict investor choice in negotiating financial contracts on trading platforms and discourage the establishment of organized trading facilities, according to market officials.

The International Swaps and Derivatives Association has upgraded its online library of ISDA documents and definitional booklets.

Belgium’s Financial Services and Markets Authority is to wait on regulatory developments in Europe before pressing ahead with regulation covering the distribution of so-called complex structured products to retail investors.

The Federal Court of Australia’s ruling against Standard & Poor’s in case over a synthetic securitization could spark cases in other common law countries.

China could soon allow onshore securities firms and brokerages to trade equity derivatives, such as total return swaps linked to the Chinese share market, according to lawyers in China.

Australian firms preparing to register as major swap participants under the U.S. Dodd-Frank rules being implemented by the Commodity Futures Trading Commission could find it hard to comply with domestic over-the-counter derivative regulations.

Attempting to simplify product information in a key information document for structured products may limit the usefulness of the disclosure and is likely to mislead investors, according to the Joint Associations Committee on Retail Structured Products.

Discussions as to how capital requirements for bank exposures to central counterparties should be determined as part of Basel III have gathered pace in recent weeks. Yet, the latest proposal from the Bank of International Settlements’ Basel Committee requires further clarity and needs to be aligned with other regulatory developments, according to market participants.