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CFTC Admits It Will Miss Deadline on Swap Dealer Study

By Alexander Osipovich 
May 26, 2015, Risk

A delayed CFTC study is raising questions about an automatic cut to the de minimis threshold for swap dealer registration planned for December 2017.

The US Commodity Futures Trading Commission (CFTC) admits it will miss a self-imposed deadline for a study to help it determine where to set the de minimis threshold for swap dealer registration – an issue that is being watched closely by energy companies, which fear a lower threshold could force them to register and face tougher rules.

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Exchanges to Police Position Limits – CFTC

By Cian Burke
May 27, 2015, FOW

CFTC chair Massad said exchanges could grant exemptions on position limits.

Exchanges could grant exemptions under the Commodity Futures Trading Comission's (CFTC) new federal position limits regime, according to the US regulator's chairman Timothy Massad.

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Deutsche Bank to Pay $55 Million to Settle Derivatives Inquiry

By Matthew Goldstein
May 26, 2015, The New York Times

Deutsche Bank “overstated” the value of a multibillion-dollar portfolio of sophisticated derivatives during the height of the financial crisis, leading it to file inaccurate financial statements for at least a six-month stretch, securities regulators in the United States said on Tuesday.

The bank, without admitting or denying wrongdoing, agreed to pay a $55 million penalty to the Securities and Exchange Commission to settle claims that its “inadequate internal accounting controls” violated federal securities law.

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Comment: Roll Scrapping for CDS Is a Start but Won’t Save Two Way Trading

By Dan Alderson
May 26, 2015, GlobalCapital

A move to halve the number of rolls for single name credit default swap is a short term act of necessity. But the CDS market needs much more reform.

Credit derivatives industry opinion is coalescing around a plan to limit single name CDS rolls to March and September, scrapping the June and December rolls. This would bring single name CDS more into line with the iTraxx and CDX credit indices, which roll just twice a year. 

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Comment: Regulation Alone Will Not Restore Faith in Markets

May 26, 2015, Financial Times

Few mechanisms underpin modern life to quite the same extent as the wholesale markets that lie at the heart of the financial system.

What may seem like arcane bits of financial plumbing, these determine the borrowing costs of households and companies, the prices at which currencies are exchanged and influence the cost of basic necessities such as food and raw materials.

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Norwegian Adoption of EMIR to Fix Cross-Border Clash

By Fiona Maxwell
May 25, 2015, Risk

EU banks will be required to clear Nkr swaps – Norwegian banks currently are not.

Non-EU countries Liechtenstein and Norway plan to transpose the European Market Infrastructure Regulation (Emir) into their local laws in 2015 – a move that could head off problems for European banks that trade Norwegian krone swaps.

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Brokers Call for CMU Swaps Extension

By Helen Bartholomew
May 23, 2015, IFR

An ambitious pan-European Capital Markets Union framework that is currently being prepared to break down national barriers and improve corporate access to financing, should be expanded to over-the-counter derivatives, some industry groups suggest.

The broad set of regulatory principles, which are set to be finalised by 2019, represent an effort to reduce financial market fragmentation, strengthen cross-border flows and diversify funding sources for businesses that are struggling to raise finance as banks rein in their lending activities as they come under severe Basel III capital pressures.

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Standard CSAs Fail on Swap Pricing, Say Investors

By David Wigan
May 23, 2015, IFR

Buyside swap market participants have raised concerns over a lack of consistency on swap pricing, which they say is undermining their ability to assign trades to third parties.

Investment managers seeking to novate swaps are being quoted such a broad range of prices that they are struggling to come to a view of the “real” value of their position, they say.

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Protest Meets Persistence Crunch at MiFID II Talks

By Tim Cave
May 22, 2015, Financial News

Banks, trading firms and stock exchanges are still in the dark on a number of tenets making up the EU’s revised trading rulebook, following disagreement and protest at a crunch meeting of policymakers.

A group of officials from the European Commission, finance ministries, central banks and national regulators – known collectively as the Expert Group of the European Securities Committee – met in Brussels on Tuesday to discuss a revision of the Market in Financial Instruments Directive, or Mifid II, which comes into force in January 2017.

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Banks Warn on New Risk Assessment Models for Trading Operations

By Martin Arnold and Laura Noonan
May 25, 2015, Financial Times

The world’s biggest banks are seeking to play on regulators’ fear of another flash crash in debt markets to lobby against new risk-calculation models, which they warn will treble the capital needed in their trading businesses.

Rules to change how banks assess risk in their trading operations are being finalised by global policy makers, who aim to set the regime in stone by the end of this year.

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