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CFTC Commissioner Slams Agency’s Swaps Rules

By Jon Watkins
January 29, 2015, The Trade

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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Warren, Cummings Ask Wall Street for Answers on Dodd-Frank Rollback

By Victoria McGrane
January 29, 2015, The Wall Street Journal

Elizabeth Warren and her allies are keeping up the pressure on the contentious Dodd-Frank rollback that made its way into a must-pass $1.1 trillion spending bill at the end of last year.

Ms. Warren (D., Mass.) and Rep. Elijah Cummings (D., Maryland) sent letters to four top Wall Street banks Thursday asking for details about how the firms will alter their derivatives trading operations in the wake of the change. Mr. Cummings is the top Democrat on the House Committee on Oversight and Government reform and Ms. Warren a member of the Senate Banking Committee.

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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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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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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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MiFID II Urgency Grows

January 26, 2015, Markets Media

The MiFID II regulatory regime is progressing toward its 2017 implementation date, with implications for U.S. companies that do business in Europe.

Firms will need to invest in building data analytics and operational efficiencies through automation, system consolidation and industrialization, as well as develop robust technology infrastructures and risk frameworks.

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ISDA Outlines Proposals for Clearing Recovery

By Cian Burke
January 26, 2015, FOW

Trade body said members should be compensayed by CCP in event of losses.

The International Swaps and Derivatives Association (ISDA) has outlined a proposed framework for central counterparty (CCP) recovery and continuity.

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CFTC's Giancarlo Attacks Dodd-Frank

By Luke Jeffs
January 27, 2015, FOW

Commissioner sees five key problems with US regulatory reform. 

US Commodity Futures Trading Commisioner Chris Giancarlo has criticised the Dodd-Frank Act and highlighted five key problems with the controversial market reform. 

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