Regulation

The costs of regulation; the end of the OTC Derivative Markets or a new beginning?

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The European Market Infrastructure Regulation (EMIR) emerged in August 2012 as Europe’s response, to the G20 2009 Pittsburgh Summit to manage OTC Derivative Markets. The European Securities and Markets Authority (ESMA) was created to draft and monitor EMIR, and quoted as saying “We won’t do this to the detrimental cost of participants”. Following this assurance, what have been the real costs of regulation to the financial services industry? Most industry participants would say “immense” and almost “prohibitive”.

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Stress Test: Reflections on Financial Crises

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by Timothy F Geithner

(Random House 2014)

cover of Stress Test
Stress Test

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Volcker Sunlight Should be the Best Disinfectant

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On the fourth anniversary of the Dodd-Frank Act, the big US banks are still black boxes in terms of their trading activity. However regulators are now getting a bit more information. Over the last month, the big banks have started providing them with so-called reporting metrics under the Volcker Rule, so that the rule’s curbs on proprietary trading can be enforced.

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End-user angst in Munich

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Munich angstIn the years since the financial crisis, an important point about derivatives has often been overlooked: they serve a genuine need by helping real companies to hedge very real risks.

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Which MAT Will Survive? Amendments, Comments, and Confusion

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As of early 2014, the mandatory trading initiative on SEFs and DCMs will take effect.  For this to occur, Make Available to Trade (MAT) determinations must be filed and approved.
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Which MAT Will Survive? Amendments, Comments, and Confusion

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As of early 2014, the mandatory trading initiative on SEFs and DCMs will take effect.  For this to occur, Make Available to Trade (MAT) determinations must be filed and approved.
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Across the Pond: A Look at European Derivatives Regulation

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Derivatives trading is a global phenomenon that has recently undergone significant changes.  This means that people involved in the industry must remain continually informed with regard to regulation in other parts of the world.   Many countries are now considering cross-border rules and regulations that will allow market participants from one area of the world to trade in another, making it important to understand some differences in the regulation.  This post will look at the European regulation scheme.

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Across the Pond: A Look at European Derivatives Regulation

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Derivatives trading is a global phenomenon that has recently undergone significant changes.  This means that people involved in the industry must remain continually informed with regard to regulation in other parts of the world.   Many countries are now considering cross-border rules and regulations that will allow market participants from one area of the world to trade in another, making it important to understand some differences in the regulation.  This post will look at the European regulation scheme.

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Update on SEF Implementation

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Beginning October 2, 2013 all swaps must be traded on either a Designated Contract Market (DCM), or Swap Execution Facility (SEF).  The CFTC implemented this rule to make the opaque Over-The-Counter (OTC) swaps market more transparent, hopefully reducing risk.  Below is a timeline of the final rule regarding Core Principles for SEFs and the required implementation of that rule: 

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Swaps Push-Out Rule: Not Doing Much Pushing

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The swaps “push-out” rule became effective in July 2013, with considerable opposition from banks.  This rule mainly affects commercial banking entities with retail bank divisions; however it can affect each member of the public as well.  In the past, big banks have failed in part because of risky investments that have lost large amounts of money, causing taxpayers to fund a bail-out.  This rule has the potential to save taxpayers money that, in the past, has been used to bail-out these institutions by eliminating some of the risky investments they make, or by denying fed
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