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Regulation

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  • Germany has liberalized the ability of foreign counterparties to terminate contracts with German institutions that are subject to insolvency proceedings.
  • Legislative proposals aimed at regulating the over-the-counter derivatives market in the U.S. and Europe has led to industry confusion over the location that a cross-border derivative transaction should be cleared in.
  • European regulators are overreacting in their response to the credit crisis and are subsequently leaving the market with a so-called ‘patchwork quilt of rules,’ according to sellside officials speaking at the International Swaps and Derivatives Association's regional conference in London today.
  • Smaller hedge funds have reportedly been shopping themselves around to larger firms in order to avoid the regulatory and compliance burdens that will come with the new regulation in the U.S., according to lawyers.
  • Dealers have been renegotiating the credit rating trigger levels in new master agreements with pension funds over the last quarter.
  • The CME Group and ICE Trust haven’t ruled out changing the capital criteria they have in place for clearing membership, according to representatives speaking at International Swaps and Derivatives Association Regional Conference in New York on Thursday.