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Swaps Said to Be Losing Special U.S. Bankruptcy Status

By Jesse Hamilton and Silla Brush
Published October 3, 2014 Bloomberg

Firms holding swaps contracts with a bank filing for U.S. bankruptcy protection would have to wait at least 24 hours before demanding collateral under new practices that may be adopted by the industry this month.

The revision could make it easier for banks to satisfy government requirements for the “living wills” they must produce to show how they’d unwind their businesses in an orderly fashion if they veered toward collapse.

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SEFs Chafe at Footnote 195

Published October 1, 2014 Markets Media

Some market participants are concerned that professionals in the embryonic swaps execution industry may get buried in paperwork related to the agreements that swap counterparties must adhere to.

A footnote (Footnote 195) of the Commodity Futures Trading Commission’s swap execution facility rules requires that SEFs become a central source of paper ISDA master agreements for non-cleared products executed on their platforms.

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New Definitions See Contract Basis Open Up on Final CDS

By Hazel Sheffield
Published September 30, 2014 GlobalCapital

Significant basis has opened up between 2003 and the new 2014 credit default swap contracts on sovereign and financial names, just a week after new CDS definition came into effect on September 22.

While CDS on 2014 definitions was expected to trade wider than those on 2003 rules, International Swaps and Derivatives Association data shows the basis that has opened up on financial names runs the gamut from 200% for UBS and Credit Suisse to 53% for HSBC, according to Gavan Nolan, director of credit products at Markit in London. Nolan told GlobalCapital that excluding Swiss banks, the biggest basis is on Italian and Spanish names. BBVA, Santander and UniCredit are all trading around 90% wider on the new definitions. Sovereign CDS has also been affected, though not to the same extent, he added. Nolan said this may show that the markets view banks based in the periphery as more vulnerable to a government intervention and, therefore, more likely to trigger CDS.

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ISDA Seeks Green Light on Margin Model

By Philip Stafford
Published September 26, 2014 Financial Times

Derivatives markets participants are expecting to receive the green light from regulators to develop an industry initiative designed to head off potential pricing confusion as new rules come into force.

The International Swaps and Derivatives Association, an industry trade body, said this week it had finalised a standard model to calculate the margin needed to back trades that would not be processed by clearing houses.

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FSB Backs Derivatives Crisis-Clause

By Philip Stafford
Published September 29, 2014 Financial Times

Global regulators have backed a plan by the global derivatives industry to allow authorities more time to decide on a resolution plan if a bank gets into financial difficulty.

The Financial Stability Board on Monday accepted a proposal overseen by the International Swaps and Derivatives Association, an industry trade body, to insert a so-called “stay” on the bank’s derivatives contracts, which are frequently worth billions of dollars in notional value.

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Isda Seeks Green Light on Margin Model

By Philip Stafford
Published September 26, 2014 Financial Times

Derivatives markets participants are expecting to receive the green light from regulators to develop an industry initiative designed to head off potential pricing confusion as new rules come into force.

The International Swaps and Derivatives Association, an industry trade body, said this week it had finalised a standard model to calculate the margin needed to back trades that would not be processed by clearing houses.

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Trillions Saved as Swaps Margining Standards Agreed

By Christopher Whittall
Published September 25, 2014 IFR

The derivatives industry has taken a major step towards harmonising margining standards across the market, in a move that will slash the amount of high-grade collateral needed to be held against uncleared swaps under beefed up regulatory standards by trillions of dollars.

The International Swaps and Derivatives Association announced at its European conference this week that industry participants had reached an agreement on a basic methodology for a standardised initial margin model (SIMM), while warning that the regulatory timetable for introducing IM requirements next year is overly aggressive.

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Sef Boss Spends His Days ‘Worrying About Costs’

By Catherine Contiguglia
Published September 24, 2014 Risk

With competition fierce and volumes continuing to disappoint, it is no fun running a swap execution facility (Sef) at the moment, attendees at the International Swaps and Derivatives Association's European regional conference were told yesterday.

"I spend most of my day worrying about costs, writing cheques for costs and wondering where the revenue is," said Krishan Singh, head of Ice Swap Trade, speaking at the Isda conference. "We saw it as a business opportunity, and since then it has become clear it is something – obviously from an execution-only point of view – that is never going to be a standalone business."

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Elusive SEF CLOB Liquidity Begins to Build

By Helen Bartholomew 
Published September 23, 2014 IFR Asia

Originally aimed at increasing efficiency and transparency, while creating a level playing field for buyside and sellside firms, the Dodd-Frank Act mandates the most liquid swaps for trading on newly-created swap execution facilities. But, so far, liquidity in central limit order books has been slow to build, leaving the market looking little-changed for some participants, who still have to rely on request for quote protocols to execute trades.

“I’m surprised by the lack of pick-up in central limit order books for liquid swaps,” said Michael O’Brien, director of global trading at buyside firm, Eaton Vance, speaking at ISDA’s annual European conference in London earlier today.

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Global Repository Plan ‘a Dream’, Says Isda CEO

By Philip Stafford
Published September 24, 2014 Financial Times

A plan to create a centralised mechanism for the world’s global over-the-counter-derivatives data has been called “a dream” by the industry’s main trade association.

Scott O’Malia, new chief executive of the International Swaps and Derivatives Association, said a recommendation by the Financial Stability Board to create a centralised utility for regulators to share data was “a nice vision for the future but the reality is dealing with what we have today and making that work”.

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