Derivs - Regulation

South Korean politicians have again pushed back the passing of key amendments to the nation’s main financial markets act, this time to October, threatening the country’s commitment to implement its central clearinghouse by year-end.

Investors are keeping tabs on the outcome of this Thursday’s European Central Bank’s policy meeting, which could see Mario Draghi, ECB president, spell out details of state intervention in the region’s troubled bond markets.

South Korea’s Financial Services Commission is looking to stimulate its exchange-traded fund business by relaxing regulations on index-tracking funds, according to China’s Xinhua News Agency.

Fears that Australia’s resources boom is finally coming to a close drove credit default swap prices on the nation’s biggest miners to rise sharply within the last week.

The European Parliament has set an indicative date of Oct. 23 for a plenary discussion on legislative proposals for the amended Markets in Financial Instruments Regulation (MiFIR) and Markets in Financial Instruments Directove (MiFID).

Most covered bonds cannot be hedged with sovereign credit default swaps, because they do not meet for the correlation level required under the European Union’s short selling ban set to start Oct. 1, according to a Bank of America Merrill Lynch report.

Japan’s Financial Services Agency and the Bank of Japan are calling on the U.S. Commodity Futures Trading Commission to shelve regulations for swap dealer registration until a global consensus on the rules can be formed.

Banks should employ risk mitigation regimes to identify, measure, monitor and control replacement cost risk for fx transactions until settlement has been confirmed and reconciled, according to the Basel Committee on Banking Supervision.

Japanese dealers will have a pricing advantage over foreign firms as they will not have to include credit valuation adjustments into their risk management capital ratios for domestic yen-denominated derivatives when new Basel III standards are enforced in March.

Hedge funds are urging the European Securities and Markets Association to include a straight-through-processing standard in the final regulatory technical standards for over-the-counter derivatives, central counterparties and trade repositories. The funds argue that an STP standard would reduce systemic risk and create an open and competitive market.

South Korean over-the-counter derivatives are continuing to grow, despite a restrictive regulatory environment in the country designed to dampen the market.

Leverage ratio calculations in the amended capital requirements directive that do not take into account the offsetting nature of the matching legs of a cleared trade would not be consistent with the direction of ongoing global regulatory reform, according to the International Swaps and Derivatives Association.