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Asia Regulators Attack EU Over Clearing House Standards

By Jeremy Grant
Published December 3, 2013 Financial Times

Europe has come under attack from Asian market regulators who are warning that the one-size-fits-all tests for clearing houses will hamper business and liquidity in their region.

The criticism shows divisions over the implementation of landmark G20 reforms of the financial system that have created friction between the US and Europe are now spreading to Asia.

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EU’s Swaps Rule Plan May Breach G-20 Accords, Barnier Warns

By Jim Brunsden
Published October 31, 2013 Bloomberg

The European Union’s financial services chief told legislators that a planned overhaul of the bloc’s rules for trading swaps may breach international agreements, threatening EU access to overseas markets.

Michel Barnier, the financial services commissioner, is urging changes to the blueprint which, as it stands, could “lead to an increase of trading of derivatives instruments on dark venues,” undermining transparency agreements reached in 2009 by the Group of 20 nations, according to a letter sent to legislators obtained by Bloomberg News.

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Quick View: Innovation the Keystone for Exchanges

By Philip Stafford
Published October 30, 2013 Financial Times

Deutsche Börse’s purchase of a stake in UK start-up Global Markets Exchange to develop swap futures may only have been at a cost of several million pounds but it signals an important juncture.

Until now the swap futures debate has been primarily a US one as it is further down the road with the implementation of the G20 mandate. But it is beginning to break beyond North American shores.

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ASX Handles First Trade in OTC Derivatives Clearing

By Simon Osborne
Published September 15, 2013 The Trade

The Australian Stock Exchange (ASX) has moved a step closer to compliance with G20 OTC derivatives rules, as the ASX’s new OTC Derivatives Clearing Service cleared its first Australian dollar interest rate swap trade at the end of last week.  It was an over-the-counter transaction between the Commonwealth Bank of Australia and Deutsche Bank and the trade cleared successfully.

ASX’s OTC Derivatives Clearing Service became available on 1 July 2013. It provides central counterparty clearing for standardised OTC-traded Australian dollar interest rate derivatives, a market with an annual turnover of around A$15 trillion.

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A Plan to Finish Fixing the Global Financial System

By Mark Carney
Published September 9, 2013 Financial Times

After the global financial crisis of 2008, the leaders of the Group of 20 leading nations mandated the international Financial Stability Board to co-ordinate reform to correct the faultlines in the financial system. The ultimate goal is to build an open and resilient financial system that supports the G20’s core objective of strong, sustainable and balanced growth. Last week in St Petersburg, G20 leaders committed to finish the job.

Our first priority is to finish increasing the resilience of the banking system. While globally systemically important banks are on course to meet new international Basel III requirements almost five years before deadline, having raised more than $500bn of capital, these aggregates mask uneven progress.

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US Fund Groups Wrestle with Derivatives Reforms

By Ellen Kelleher
Published August 25, 2013 Financial Times

They may not like it, but they have little say in the matter. Within weeks, asset managers and pension funds in the US must clear derivatives trades via a central clearing house.

On September 9, another wave of deadlines for the derivative reforms written into section VII of the Dodd-Frank regulatory regime arrive. They present another step in the reformation of these opaque instruments, which world leaders promised in 2009 at a G20 Summit in Pittsburgh after the collapse of Lehman Brothers and the insurer AIG exposed examples of misuse.

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Hong Kong Moves Forward on OTC Implementation

By Simon Osborne
Published August 15, 2013 The Trade

Hong Kong has been one of Asia’s slowest movers in implementing G20 rules on OTC derivatives. However, progress is now being made as a bill introducing mandatory reporting clearing and trading obligations was submitted to Hong Kong’s government, the Legislative Council, on 10 July.

At the house committee held on 12 July, members decided to set up a Bills Committee to study the bill.  The second and third reading will take place at a later date.

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Comment: US-EU Accord Swaps Uncertainty for Pragmatism

By James Nicholls
Published July 19, 2013 Financial Times

In the four years since the G20 set out its principles for derivative market reform, the industry has been enveloped by a sense of gloom.

Many feared that national regulators, focused on parochial concerns about the health of banks in “their patch” and egged on by populist, flag-waving politicians, had abandoned the idea of a global market. But last Thursday’s announcement that the Commodity Futures Trading Commission and the European Commission (EC) would work to achieve mutual recognition of their requirements was a welcome burst of pragmatism.

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Filling the International Financial Reform Leadership Void

By Blanche Lincoln
Published July 9, 2013 The Huffington Post

As we approach the three-year anniversary of the enactment of Dodd-Frank, its implementation is substantially under way. No other regulator has moved the needle further than CFTC Chairman Gary Gensler. This applies to both foreign and domestic regulators. Truly, the CFTC has been the leading force to meet our 2009 G-20 commitment of instituting reforms to the over-the-counter derivatives market.

Knowing Chairman Gensler, this comes as no surprise. He was an invaluable and trusted resource to me throughout the development of the derivatives title of Dodd-Frank. Without his input and seemingly inexhaustible energy, the legislation would not have directed the types of safeguards consumers and taxpayers deserve. Chairman Gensler has also played an active role internationally.

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Revenue Plunge Fears Could Prompt Banks to Head for the Door

By Anish Puaar
Published June 17, 2013 Financial News

Banks face a substantial revenue decline as a result of a largely overlooked rule in new G20-led derivatives legislation that aims to better protect the assets they hold on behalf of their buyside clients.

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