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Industry Fears Mifid Shake-up of Futures Clearing

By Cecile Sourbes
Published August 26, 2014 Risk.net

Dealers fear European rules designed to broaden access to over-the-counter derivatives clearing houses could be extended to the futures market, where a similar service already exists but is subject to much looser rules. If the stricter OTC standards were applied in the exchange-traded world, the service would require a radical rethink and may not be possible at all, banks and industry bodies argue.

The concerns were sparked by the European Securities and Markets Authority (Esma), in its draft standards on the implementation of the revised Markets in Financial Instruments Directive (Mifid II). In its May 22 proposals, Esma asked market participants whether there was any reason to have different rules on indirect clearing in the exchange-traded and OTC markets.

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Collateral Optimization Benefits the Big

By Mike Kentz
Published August 23, 2014 IFR

Market participants expecting to glean material cost-savings in the over-the-counter swaps market through collateral optimization strategies may want to think again, according to a report from Deloitte.

Only the largest swaps users capable of making significant investment in IT systems and navigating the changing cost of collateral that will occur with the eventual rise in rates should dive into building internal optimization capabilities, the report said.

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New EMIR Reporting Requirements Kick In

Published August 19, 2014 Markets Media

Trade repositories have received millions of valuation reports under the new reporting regulations which came into effect under the European Market Infrastructure Regulations last week.

Since February, both sides of derivatives deals in Europe have been required to report over-the-counter and exchange-traded derivatives to one of six approved trade repositories under the Emir.

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Surprisingly Good Start for European Derivatives Reporting Mandates

By Jon Watkins
Published August 14, 2014 The Trade

The start of collateral and valuations reporting under the European market infrastructure regulation (EMIR) has been smoother than OTC and listed derivatives transaction reporting requirements introduced in February, according to industry experts.

From 11 August, both buy- and sell-side firms in Europe had to begin reporting the collateral they post for derivatives trades along with the valuations of transactions, in addition to the 85 fields already required by regulators.

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‘Lessons Learned’ as New Reporting Rules Pass Without a Hitch

By Anish Puaar
Published August 14, 2014 Financial News

The latest wave of derivatives reporting rules in Europe have been well handled by market participants, with many stating that lessons have been learnt from the shambles that followed the initial deadline in February.

On August 11, valuations and collateral held against derivatives trades done in Europe needed to be reported to approved trade repositories on a daily basis as part of the European Market Infrastructure Regulation.

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Germany Finds Emir Enforcement Fix

By Fiona Maxwell
Published August 13, 2014 Risk

Derivatives users in Germany are set to face stricter supervision of their reporting obligations than their counterparts elsewhere, thanks to a unique system that turns external auditors into the eyes and ears of the regulator – and forces companies to pay for the new checks. Lawyers in other countries, including the UK, say it will be next-to-impossible for their own local authorities to enforce the new reporting rules, which came into force as part of the European Market Infrastructure Regulation (Emir) in February this year.

"The new law puts pressure on corporates to ensure they have a proper Emir process – previously, they weren't directly regulated," says Frank Müller, senior manager in the financial services division of KPMG in Germany, one of the firms that will be auditing Emir compliance.

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Banks Shun Emir's Indirect Clearing Service

By Cecile Sourbes
Published August 12, 2014 Risk

Banks are still incapable of offering indirect clearing for over-the-counter derivatives more than two years after rules for the service were added to the European Market Infrastructure Regulation (Emir) – an attempt by regulators to ensure small OTC market participants would be able to clear. Big banks say the terms on which they would have to offer the service make it commercially unviable.

Indirect clearing allows the clients of a clearing member to take on clients of their own, but the member remains the ultimate guarantor of the risk, and Emir requires both groups of customers to be treated the same. That means giving the so-called end-clients a choice of at least two forms of collateral protection.

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ESMA Releases List of Authorized Counterparties Outside the EU

By Andrew Saks-McLeod
Published August 12, 2014 LeapRate

As the European rulings on post-trade processing continue to take shape, the European Securities and Markets Authority has today published a list of central counterparties (CCPs) which are established in countries located outside the European Union and European economic area, that have applied for recognition under the European Union regulatory framework on OTC derivatives, CCPs and trade repositories in accordance with the European Market Infrastructure Regulation (EMIR).

The list comprises of thirty-eight executing venues, clearing houses, exchanges, diversified market places and depositories, which are located in various regions including Australia, the Asia Pacific, Israel, and North America.

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Next Phase of Reporting Begins in Europe

Published August 11, 2014 FOW

Collateral and valuation data for derivatives trades will have to be reported to trade repositories (TRs) from today under the European Market Infrastructure Regulation (Emir).

The new requirements apply to financial firms and non-financials who have not been granted an exemption. However, doubts remain about the model used in Europe and the value of the data.

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Regulatory Investments Begin to Turn the Corner

By Rob Daly
Published August 11, 2014 The Trade

Buy-side compliance expenditure will likely ease once regulators finish deploying major market reforms, such as Dodd-Frank, MIFID and EMIR, according to Matthew Gibbs, product manager at technology vendor Linedata, who believes recent reforms have changed internal compliance organisation permanently.

Gibbs dates changes in regulators’ behaviour to the eve of the global financial crisis.

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