By Michael Watt
Published December 19, 2012 Risk
The Bank of England (BoE) will consult with the dealer community over central counterparty (CCP) risk standards once it begins supervising financial market infrastructures (FMIs) from next year, according to Edwin Schooling Latter, head of the BoE's payments and infrastructure division.
Speaking at a BoE event yesterday to outline its new supervisory approach, Schooling Latter said oversight would be improved by listening to an array of key market participants. "We will undoubtedly do a better job as supervisors if we not only listen to the directors and operators of financial market infrastructures, but also to their participants," he said.
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By Richard Henderson
Published October 25, 2012 The Trade
The International Swaps and Derivatives Association has thrown its support behind an industry standard on over-the-counter (OTC) derivatives reporting and will provide program management, governance and industry oversight for the service.
The clearing connectivity standard (CCS) was developed by service provider Sapient Global Markets to improve reporting and communication for asset managers, futures commission merchants, central counterparties (CCP) and custodians. The service has already been adopted by 12 buy- and sell-side firms, with more expected to join over the next year.
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By Duncan Wood
Published October 24, 2012 Risk
Smaller firms in Europe will find it harder to clear over-the-counter derivatives as a result of rule changes from the European Securities and Markets Authority (Esma), according to two-thirds of respondents to a Risk.net poll. Esma had proposed that a service designed for these smaller market participants – known as indirect clearing – would have to be offered by all members of a central counterparty (CCP), but abandoned that position when it finalised the rules on September 27. Instead, indirect clearing will be an optional service.
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By Alexander Culley
Published August 23, 2012 IFR Asia
The charge towards the central clearing of “standardised” over-the-counter derivatives has been widely publicized, with the European Securities and Markets Authority recently consulting on draft technical standards – the flesh on the bones – for the European Markets Infrastructure Regulation, or to give it its full name, the “Regulation … on OTC Derivatives, Central Counterparties and Trade Repositories”.
However, the fact remains that a substantial proportion of OTC derivatives will not be suitable for central clearing. Where does this leave the participants in such interests?
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By Tyler Moeller and Joshua Walsky
Published August 16, 2012 Financial Times
The $700tn global swaps market will change dramatically when regulations emerging from the Dodd-Frank act take effect. An era once dominated by low-tech, high-touch bilateral voice transactions will give way to electronic trading. The implications are profound and the complexities of adapting to this new marketplace present a daunting challenge to the industry.
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By Xavier Hoche
Published August 15, 2012 The Trade News
Clearing houses have blamed regulatory delays for the lack of progress on the development of solutions to ensure the protection of buy-side assets under new European OTC derivatives legislation.
The acknowledgement follows concerns raised by UK buy-side trade body the Investment Management Association (IMA) in response to a consultation held by the European Securities and Markets Authority on detailed rules underpinning the European market infrastructure regulation (EMIR).
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By Ben Moshinsky and Jim Brunsden
Published August 9, 2012 Bloomberg News
Derivatives traders may take losses on the margins they post at clearinghouses during a crisis, as global plans to eradicate the dangers of too-big-to-fail financial institutions gather pace.
Losses on so-called variation margin and conversion of creditor claims into equity are among options proposed by a group of regulators last week to protect taxpayers from future financial catastrophes when other buffers are depleted. Clearinghouses act as central counterparties in derivatives contracts to spread the risk of default.
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By Elliot Holley
Published June 11 2012 The Trade
Central counterparty (CCP) clearing for OTC instruments may not make financial markets any safer, a team of J.P. Morgan analysts contend.
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By Nick Sawyer
Published May 02 2012 Risk
Central counterparties (CCPs) have been invited to join the International Swaps and Derivatives Association credit determinations committees as observers, to ensure they are fully prepared for any operational complexities that might be associated with a particular credit event
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By Joe Rennison
Published April 5 2012 Risk
Rules requiring the use of clearing houses in over-the-counter derivatives markets are still being finalised, but regulators are already worried market participants are trying to find a way out.
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