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CFTC’s Giancarlo Proposes Swap Personnel Exams

By Katy Burne
January 28, 2015, The Wall Street Journal

A top U.S. regulator is urging the introduction of examinations for swaps traders and brokers, in the latest effort to overhaul opaque derivatives markets that have drawn criticism since the financial crisis.

J. Christopher Giancarlo, the lone Republican among four commissioners at the Commodity Futures Trading Commission, proposes the action to “enhance the knowledge, professionalism and ethics of personnel in the U.S. swaps markets.

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Basel Committee Overhauls Banks’ Disclosure Model

By Caroline Binham
January 28, 2015, Financial Times

The way banks disclose risks they hold on their balance sheets has been overhauled by the world’s top banking supervisor in an effort to increase transparency and make it easier to compare lenders’ assets and capital buffers.

The Basel Committee on Banking Supervision pushed ahead on Wednesday with plans to overhaul reporting standards and will force banks to use new, more consistent and detailed models in their financial reporting from the end of 2016. The move is part of a wider focus on how banks assess the riskiness of their assets, which has a consequence on how much capital they must hold.

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Wall Street Creating CLOS That May Bypass Rules: Credit Markets

By Kristen Haunss
January 28, 2015, Bloomberg

Wall Street has another rule it’s trying to get around: regulations seeking to limit risk-taking by managers of collateralized loan obligations.

Leon Black’s Apollo Global Management LLC, Carlyle Group LP and a unit of Credit Suisse Group AG have all taken steps in the past two months to create CLOs now that they may be able to refinance after the rules take effect in December 2016 without having to comply with the new regulations, according to three people with knowledge of the matter. The firms are trying to avoid a requirement to hold a stake in the funds they manage.

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IOSCO Sets Risk Standards for Non-Cleared Swaps

By Cian Burke
January 28, 2015, FOW

Iosco outlined margin requirements for uncleared OTC derivatives in 2013.

The International Organisation of Securities Commissions has finalised its risk mitigation standards for uncleared over-the-counter derivatives. 

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Europe’s MiFID Review Aims to Cut Market Data Fees

By Luke Jeffs, Cian Burke
January 28, 2015, FOW

Esma wants to restrict the fees charged by exchanges and vendors.

The European Securities and Markets Authority (Esma) plans to restrict the fees exchanges and data vendors charge for market data in a move to make information more afforable for trading firms. 

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EU Says Near Deal with Washington on Derivatives Rules

By Huw Jones
January 27, 2015, Reuters

The European Union and the United States are poised to accept each other's rules on financial derivatives trading in a bid to prevent a global market that supports economic growth from fragmenting, a senior EU official said on Tuesday.

The two sides are introducing rules to make derivatives such as credit default swaps more transparent after their opacity played a key role in exacerbating the 2007-09 financial crisis.

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ICE Reforms Interest Rate Swaps Benchmark

By Jon Watkins
January 27, 2015, The Trade

Intercontinental Exchange (ICE) will change the way it calculates the benchmark rate ISDAFIX by basing it on tradable quotes.

The changes are being made in an attempt to improve market confidence by aligning it with the International Organization of Securities Commissions’ global principles.

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Volcker Rule Puts Trading in Spotlight

January 27, 2015, Markets Media

The so-called Volcker Rule, which effectively bans proprietary trading by banks, has forced market participants to consider the boundaries between trading and investing, which at times can be blurry.

“The Volcker Rule deals with proprietary trading, so you have to be trading in a trading account which is short-term and subject to market risk capital rules,” said Curtis Tao, associate general counsel of Citigroup, at the annual meeting of the New York State Bar Association on Monday. “It doesn’t deal with investing, which means investing your own capital, but it just so happens that it’s a long-term position rather than a short-term trading position.”

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Comment: Commit to Removing Legal Barriers to Data-Sharing

By Larry Thompson
January 27, 2015, Financial Times

Sir, Regulators are right to point out that a common financial language is essential to addressing some of the failings that were made apparent during the financial crisis (“We need a common language for data to prevent next Lehman”, Insight, January 15). However, agreeing on a common language, while an important step, will have limited impact if we do not address a number of practical and legal barriers that make cross-border data sharing difficult, if not outright impossible.

If we look at the derivatives markets, whose opacity was largely blamed for the last financial crisis, global regulators and the industry have made significant strides in addressing the data gap that existed in 2008. However, while trade repositories were heralded as an essential pillar of systemic risk management, the global derivatives reporting regime that emerged following the crisis is fragmented along national lines. Five years since the system was devised, cross-border identification of risk remains extremely difficult for macroprudential authorities.

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GFI Head Makes Last Call for CME Backing

By Philip Stafford
January 27, 2015, Financial Times

The executive chairman, founder and main shareholder of interdealer broker GFI Group has made a last-ditch effort to muster support for a takeover by CME Group by disclosing that he and his ex-wife will take a reduced price for their shares.

In an open letter to shareholders published on Tuesday, Michael Gooch said he would be paid only $4.44 for his shares compared with the $5.85 in cash and stock deal on offer from the Chicago futures exchange.

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