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Carney Urged to Help End Masking of Swap Counterparties

By Fiona Maxwell
Published August 21, 2014 Risk

Twelve regulators have called for the Financial Stability Board (FSB) to make a "clear and unambiguous statement" that countries need to remove obstacles preventing derivatives users reporting their trades, such as privacy laws that prohibit the disclosure of counterparty details. Two banks told Risk in May that they are choosing to breach reporting rules where they conflict with local laws, by deliberately masking counterparty identities.

The letter represents the view of the OTC Derivatives Regulators Group (ODRG), but is signed by Mary Jo White, chair of the US Securities and Exchange Commission. It was sent to the FSB chairman, Mark Carney, on August 12.

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Once Powerful, Mary Jo White’s S.E.C. Is Seen as Sluggish and Ineffective

By Jesse Eisinger
Published August 13, 2014 New York Times DealBook

Mary Jo White took the helm of the Securities and Exchange Commission facing high hopes that she could turn around the once-proud agency. More than a year into her tenure, she has disappointed a wide swath of would-be allies.

Over the last several weeks, I’ve been talking to fellow regulators, administration officials, current and former S.E.C. staff members, financial reform advocates and people on Capitol Hill whose opinions of Ms. White’s performance range from dissatisfied to infuriated.

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Bill Gross’s Total Return ETF Allowed to Trade Derivatives

By Mary Childs
Published August 11, 2014 Bloomberg

The U.S. Securities and Exchange Commission approved the use of derivatives in Pacific Investment Management Co.’s Total Return exchange-traded fund, allowing it to more closely track the world’s biggest bond mutual fund.

The regulatory body’s approval of the Nov. 6 request to amend the ETF (BOND)’s description means it will be able to invest in options, futures or swap agreements, according to the July 24 filing.

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Divergent Nexus Rules Threaten Reporting Chaos in Asia

By Viren Vaghela
Published August 6, 2014 Asia Risk

Asian jurisdictions are accustomed to playing second fiddle to their more established derivatives counterparts in Europe and the US. This has been especially noticeable in post-crisis reforms with the phrase "we are taking a wait-and-see approach" becoming predictably familiar among some regional regulators. However, in a rare move Asia is taking the lead in determining how so-called nexus trades should be reported.

"The nexus issue is unique to Asia," says a compliance source at a global bank in Hong Kong. "The US Securities and Exchange Commission is looking at this approach but hasn't come up with a proposal yet meaning we will be the first to implement it so we need to ensure as a region that we get the definition right."

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US Regulators Urged to Accept Dealers' Use of Affiliates

By Peter Madigan
Published July 18, 2014 Risk

Politicians and regulators in the US should learn to live with the fact that US banks are funnelling a large portion of their overseas swaps business through non-guaranteed affiliates (NGAs), according to two former senior regulators. Potential responses to the strategy – which insulates the affiliates and their non-US customers from the Dodd-Frank Act – could set the US on a collision course with foreign officials, they argue.

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SEC's Cross-Border Rules Expose Loopholes

By Jon Watkins
Published July 8, 2014 The Trade

The Securities and Exchange Commission (SEC) has stepped out of the shadows to enforce US regulatory requirements on foreign banking operations, though issues remain in its cross-border reach.

Under the SEC’s new rules, the sweeping new derivatives regulations will apply to foreign affiliates whose swap trades are guaranteed by US banks.

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Comment: Another Failure to Regulate Derivatives

By The Editorial Board
Published July 2, 2014 New York Times

By the time the Securities and Exchange Commission finalized a rule last month to regulate derivatives under the Dodd-Frank financial reform law, the big banks that dominate the multitrillion-dollar market had already figured out how to game it.

This is not a tale, however, of how wily banks always find a way around the rules. In this case, the S.E.C. has written and passed a rule that is custom built for evasion, all the while insisting, unconvincingly, that it does not have the legal authority to be any tougher.

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U.S. SEC Votes to Adopt Part of its Swaps Cross-Border Rule

By Sarah N. Lynch
Published June 25, 2014 Reuters UK

The U.S. Securities and Exchange Commission voted on Wednesday to adopt the first of a series of crucial rules that lay out when foreign banks that deal in derivatives must comply with U.S. regulations.

SEC commissioners said the final rule, which is required by the 2010 Dodd-Frank Wall Street reform law, contains some tougher measures than previously proposed to close some potential loopholes that could have permitted foreign banks to circumvent U.S. regulations.

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Extent of U.S. Swaps Clampdown Overseas to Get SEC Vote

By Dave Michaels and Silla Brush
Published June 25, 2014 Bloomberg

The Securities and Exchange Commission plans to vote today on a plan that will define how far its regulations reach into a segment of the $710 trillion global swaps market.

The SEC’s rule will outline how new requirements apply to derivatives traded by foreign divisions of U.S. banks including JPMorgan Chase & Co. (JPM:US) and Goldman Sachs Group Inc. (GS:US) The new rule comes as Wall Street takes steps to restructure trades overseas to avoid Dodd-Frank Act regulations intended to increase competition and price transparency.

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Senate, House Unveil Dueling Budget Plans for SEC, CFTC

By Sarah N. Lynch
Published June 24, 2014 Reuters

The U.S. Senate and House of Representatives have released dueling fiscal 2015 budget proposals for the country's top two financial market regulators, with Democrats seeking more funding and Republicans urging more belt-tightening and limits on how money is spent.

The two opposing spending bills mark the latest partisan dispute over how much money to allocate for the Securities and Exchange Commission and the Commodity Futures Trading Commission.

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