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Regulation

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  • The South Korea National Assembly has approved a tax on non-deposit foreign currency liabilities, that could capture foreign currency collateral held against derivatives transactions, beginning Aug. 1.
  • The latest proposed text of the European Market Infrastructure Regulation from the European Council’s presidency limits clearing obligations to over-the-counter derivatives, running counter to moves by the European Commission and the European Parliament to encompass all derivatives.
  • A loophole in the Dodd-Frank Act may exempt collateralized loan obligations from proposed risk retention rules.
  • South Korea’s Financial Supervisory Service and the Bank of Korea have announced they are adding at least two banks to its inspection of fx derivatives trading—specifically kimchi bonds--and extending the period for the probe.
  • The International Swaps and Derivatives Association, the International Capital Markets Association and the Association for Financial Markets in Europe have said in a letter that the U.K. regulator should exercise caution before banning any structured products.
  • Buy-side firms and other end users will face skyrocketing reporting and systems costs if they are caught up in over-the-counter derivatives regulation meant primarily for liquidity providers, according to a report from Aite Group.