DerivAlert Commentary

Derivalert’s Top 10 News Stories of the Year: 2014

Posted on Tue, Jan 06, 2015 @ 09:40 AM

Just twelve months ago, as we turned the corner from 2013 to 2014, it looked like some of the derivatives reform upheaval was starting to subside – at least in the U.S.  Final SEF rules had been passed; swaps were being made-available-to-trade; we survived the government shut-down. By most accounts, things were transitioning in an orderly fashion in the U.S. and Europe looked like it was going to be the center of the action.

In fact, as we wrote in the January 15, 2014 edition of the DerivAlert newsletter: “It feels like déjà vu all over again as the headlines about European derivatives reform start to pile up on both sides of the Atlantic.  Just as we saw last year in the U.S., as each new rule implementation deadline draws closer, the fever pitch of industry concerns grows louder.”

We were partly right.  European derivatives reform did intensify over the course of 2014.  But so did the ongoing scrutiny of U.S. reforms, with the jury still out on what the final impact of the transition to SEF trading of derivatives will be on the industry.

But what were the absolute biggest stories of the year?  To find out, we dug into the analytics to find out which posts were the most viewed over the course of 2014. 

Here they are in descending order, as chosen by you, the DerivAlert reader, our top ten news stories of 2014:

10) Packaged Swaps Get SEF Go-Ahead

By Mike Kentz
Published May 3, 2014, IFR

Multi-legged swap transactions are set to make the move to swap execution facilities after the CFTC confirmed a set of phase-in dates. The decision finally removes a major industry bugbear, as the delayed migration of packages towards mandatory SEF trading was seen to be hampering volumes on the new regulated platforms. 

full article  (subscription)

9) Wall Street Gets Three-Month Delay on Interest-Rate Swap Mandate

By Silla Brush
Published February 10, 2014, Bloomberg

U.S. banks and other financial firms won a three-month delay for as much as half of the interest-rate swap market to meet a federal requirement to trade on platforms designed to increase competition and transparency.

full article  (free)

8) Thousands of Derivatives Users Not Ready for EMIR Reporting

By Fiona Maxwell
Published February 4, 2014, Risk

With just over a week left on the clock, regulators are said to be worried the market is not ready for the start of mandatory trade reporting under the European Market Infrastructure Regulation (Emir). According to some estimates, a little over 8% of the region's derivatives users have so far registered for the preliminary legal entity identifier (LEI) that will allow them to report their over-the-counter and listed trades.

full article  (subscription)

7) Time for a Change in Derivatives Trading

By Anish Puaar
Published April 21, 2014, Financial News

The clock has finally started ticking down to one of the most substantial changes ever seen in the European market for over-the-counter derivatives, a significant part of the global market worth €692 trillion at the end of June 2013, according to the Bank for International Settlements.

full article  (subscription)

6) SEF Execution of Package Trades to be Postponed

By Peter Madigan
Published November 6, 2014, Risk

CFTC chairman confirms no-action relief extension due to lack of market readiness.

The Commodity Futures Trading Commission (CFTC) is to postpone the migration of the most complex package transactions into swap execution facility (SEF) trading after recognizing that US swap market participants are not prepared to execute them on the trading venues.

full article  (subscription)

5) CFTC Said Ready to Push Interest-Rate Swaps to Trading Platforms

By Silla Brush
Published January 9, 2014, Bloomberg

The Commodity Futures Trading Commission is poised to push interest-rate and credit swaps onto trading platforms designed to make prices more transparent and competitive.

full article  (free)

4) Many Firms Will Not Meet EMIR Reporting Deadline, Says ISDA’s Pickel

By Tom Osborn
Published January 27, 2014, Risk

Many market participants will not be able to comply with new European derivatives reporting requirements when they take effect next month, and will have to rely on regulatory forbearance, according to Bob Pickel, chief executive of the International Swaps and Derivatives Association, who was speaking at a legal conference today in the Netherlands.

full article  (subscription)

3) SEF Trading Volumes Emerging from Summer Doldrums

By Ivy Schmerken
Published September 18, 2014, Wall Street & Technology

Despite the summer doldrums of SEF trading in interest rate swaps, activity in early September is showing signs of a rebound as traders conduct more of their business on the electronic venues. Tradeweb Markets announced Wednesday that average daily volume on its TW SEF for trading of interest rate swaps increased 20-fold to more than $20 billion in the first two weeks of September, over the first two weeks of trading on SEFs in October 2013.

full article  (free)

2) Make or Break Time for SEFs

By Mike Kentz
Published May 17, 2014, IFR

Two swap execution facilities have parted ways with their CEOs in the last two weeks in what market participants believe could trigger attrition across the 24 registered platforms. Consolidation has been predicted since the beginning of SEF discussions, but in a surprise turn it could be occurring just as volumes are set to receive a boost. 

full article  (free)

1) SEF Merger Talk Grows Stronger

By Mike Kentz
Published June 14, 2014, IFR

The saturated U.S. market for over-the-counter swap execution is on the cusp of the first wave of consolidation, just four months on from the first mandated execution of standardized derivatives on newly created swap execution facilities.

full article  (free)

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Tags: regulation, Top News Stories, Derivatives, DerivAlert