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If cross-border rules currently proposed by the US Securities and Exchange Commission and the Commodity Futures Trading Commission are not harmonized, international derivatives markets could be damaged, according to exchange executives and derivatives industry leaders, who testified before the US House of Representatives Committee on Agriculture Tuesday. 

The cross-border rules are particularly important for large integrated oil and natural gas companies that have operations outside of the US and use swaps products to hedge credit and foreign exchange risks. 

Foreign countries are being too critical and potentially hurting delicate negotiations with U.S. regulators over how broadly they should apply new over-the-counter derivatives rules to trades that cut across borders, U.S. Treasury Secretary Jack Lew said on Tuesday.

Lew's comments, made during testimony before the Senate Banking Committee in a broad-ranging hearing on regulatory issues, marked a rare occasion where he publicly waded into the thorny debate over cross-border regulations for swaps.

Commodity Futures Trading Commission investigators are poring over 1 million e-mails and instant messages as part of their price-manipulation probe of a swaps benchmark that helps determine interest rates on everything from annuities to bonds linked to skyscrapers.

Investigators preparing to interview bankers and brokers in the coming weeks are scouring the records collected under subpoena for any evidence that the world’s largest banks and ICAP Plc brokers rigged the ISDAfix swaps rate, said a person familiar with the matter, who asked not to be named because the probe is private. ICAP Chief Executive Officer Michael Spencer said last week that the company’s investigations have turned up no wrongdoing.

New rules to regulate derivatives, adopted last week by the Commodity Futures Trading Commission, are a victory for Wall Street and a setback for financial reform. They may also signal worse things to come.

The regulations, required under the Dodd-Frank reform law, are intended to impose transparency and competition on the notoriously opaque multitrillion-dollar market for derivatives, which is dominated by five banks: JPMorgan Chase, Goldman Sachs, Bank of America, Citigroup and Morgan Stanley.

Unless you're employed by a derivatives trading desk at a large bank, here's some good news: The derivatives cabal is slowly but surely headed for a break-up.

The Commodity Futures Trading Commission yesterday approved new derivatives rules required under the 2010 Dodd-Frank financial reform law. They dictate how buyers and sellers must enter contracts, including credit-default swaps and interest-rate swaps, in the $633 trillion market.

After two years of bickering over the construction of swap execution facilities, swaps users and would-be SEFs can finally circle a date on their calendar for when trades will be electronically executed.

With the agency voting the rules into place this week, market participants can home in on early December as the time when all swaps users will be transacting standardised swaps on SEFs.

The number of US dollar-denominated interest rate swaps (IRSs) being cleared has gone up by six percentage points since US rules kicked in two months ago, according to a new tool using data from the Depository Trust and Clearing Corporation (DTCC).

The programme shows about 62% of US$37.3 billion worth of standardised US$ interest rate swaps trades were cleared on March 11, when new clearing rules took effect for swap dealers in the United States. There has been a steady increase since, with 68% of US$45.7 billion worth of trades being cleared yesterday.

JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. and the world’s largest banks are set to win a rollback in final Dodd-Frank Act rules intended to transform the swaps market by increasing competition.

The Commodity Futures Trading Commission’s five members are scheduled to vote in Washington today on rules determining how buyers and sellers must trade credit-default, interest-rate and commodity swaps in a $633 trillion global market.