Managing client protection in the new regulatory ecosystem can be achieved in a truly cost efficient manner by introducing a direct clearing model. The beauty of a well-designed direct clearing model is that all client driven capital costs for repo transactions are eliminated while clients receive “best-in-class-client-protection”. In other words, Direct Clearing has the potential to benefit the entire financial industry.
Since Regulation Asia’s last OTC Derivatives Summit, new uncertainties have emerged. Extant challenges—such as banks’ struggle for profitability amid shrinking balance sheets and increasingly burdensome capital adequacy requirements—appear no closer to being resolved. A seeming lack of regulatory coordination, exemplified by Hong Kong, Singapore and Australia not carrying through with the 1 September deadline for initial margin, has only added to the problem. OTC Space registered readers can access a 20% discount on registration.
Illuminate Financial Management, founded in 2014 in London, is a venture capital firm funding financial technology startups that have the potential to effect real change within capital markets. Since late 2015, folks at Illuminate have been investing from the IFM Fintech Opportunities Fund, which counts Deutsche Boerse Group and Markit among its LPs.
In this article, I will provide a snapshot of some derivatives related regulatory developments, which may be of interest to the reading audience of Rocket. It is to some extent a random selection of topics, all of which have however been, or are currently, the centre of attention of the relevant regulators and the derivatives industry, either as a result of the introduction of new regulations or through the publication of consultation papers. Given that this article seeks to focus on some main regulatory highlights, the level of detail provided will necessarily be limited. However, a further in-depth analysis of any of the topics discussed below may follow in a future article.
When ISDA says "other regulators" - do they mean ESMA? ;-)
Six months to comply for US regulated firms
A year ago there were several articles and posts marking the 2nd Anniversary of EMIR Trade Reporting, which went live on 12th of February, 2014.
A recent Google search on the term “RegTech”, which is short for Regulatory Technology, returned no less than 260,000 results and the news section is filled with more than 13,000 articles.
The preparations for March 1st are well behind schedule across the OTC market. Find out what firms have been doing, what approaches they are taking, and how to reduce the economic impact of not being ready.
Normans post below refers to a survey of 641 risk management professionals. His analysis of the results and the comments make an interesting read. Does your firm have a Risk Management Strategy which informs key decision makers? Bill
First, the good news. The number of credit support annexes (CSAs) that had been amended to meet new regulatory variation margin requirements more than doubled during the past week.
Get your questions in now.... use the ESMA email address and see what happens:
This September marked seven years since the symbolic gathering of world leaders at the G20 summit in Pittsburgh that would radically change the face of derivatives trading. As markets continued to reel from the Lehman Brothers collapse a year earlier, they outlined an edict that all standardised (where appropriate) over the counter (OTC) derivatives would be “cleared through central counterparties by end-2012 at the latest.” It also established that non-centrally cleared contracts should be subject to (…) mitigate(d) systemic risk”. In other words establish risk management processes when OTC products are not centrally cleared.
The European Securities and Markets Authority (ESMA) has issued today a report on Distributed Ledger Technology (DLT).
The deadline to be prepared to the March 1st Uncleared Margin regulation is looming. Our panel of experts will provide insight into the current state of preparations, including Heads of Legal from Standard Chartered and Societe Generale.
The European Securities and Markets Authority (ESMA) has published today the updated Questions and Answers
The European Securities and Markets Authority (ESMA) has issued today an update of its Q&A on pra
In January 2016, the Basel Committee on Banking Supervision published the final rules resulting from its Fundamental Review of the Trading Book (FRTB). The rules are due to come into effect at the end of 2019 and are encapsulated in BCBS 352, Minimum Capital Requirements for Market Risk.
The status of the NLX trading platform changes dramatically.
From March 1, thousands of financial institutions will find themselves subject to new rules that will require them to exchange variation margin on their non-cleared derivatives trades.
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