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Regulation

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  • European Union representatives will propose to G20 states in June to agree to ban naked credit default swaps trading on government-backed bonds, according to Nikolaos Chountis, a member of the European Parliament for Greece.
  • E.U. politicians have urged the European Commission and European Council not to implement a financial transactions tax on derivatives without agreement in writing from other international financial markets saying they will do the same.
  • The Reserve Bank of India is planning to require that all credit default swaps have rated underlyings because it believes CDS spreads alone should not be relied upon by investors. But some traders are unsure the ratings will be heeded.
  • Politicians in the European Parliament’s Economic and Monetary Affairs Committee are at odds over whether bank stakes in clearing houses should be capped or abolished.
  • Structured products professionals are preparing a menu of risks associated with marketing reverse convertibles. The move comes after the U.S. Financial Industry Regulatory Authority raised concerns about how they have been marketed.
  • Patrick Pearson, head of financial markets infrastructure within the European Commission's internal market division in Brussels, told Derivatives Week in an exclusive interview with London reporter Rob McGlinchey that the Commission is collecting data from dealers and end-users with a view to drawing up a benchmark of bid/ask spreads. The aim is to help shave users' hedging costs and determine how expensive it would be on top for users to clear their trades.