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SEC Adopts Rules Establishing Regime for Swap Data Warehouses

By Sarah N. Lynch
January 14, 2015, Reuters

U.S. securities regulators took another step toward shedding more light on the over-the-counter derivatives market Wednesday, adopting a raft of measures to give them a direct window into the opaque market.

The Securities and Exchange Commission's rules lay out a regulatory framework for "swap data repositories" like those operated by the Depository Trust & Clearing Corp, a specialized warehouse that collects trillions of dollars worth of swaps trades, shares it with regulators, and disseminates aggregated data to the public.

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ESMA’s RFQ Battle Could Hinder Trading

By Gabriel Surprise
January 14, 2015, GlobalCapital

The European Securities and Markets Authority’s lack of understanding on how request-for-quote and other trading protocols work is raising concerns among market participants. If ESMA imposes overly-constrictive transparency regulation on these technical systems, market participants may refrain from using them, according to lawyers.

“ESMA hasn’t yet addressed the level of technical systems…I think they’re still getting to grips with how they work actually in practice,” Damian Carolan, partner at Allen & Overy in London, told GlobalCapital. “These systems exist today for bond markets and to a certain 
extent derivatives markets, and they work well in a less liquid environment, and if you start imposing very specific and very prompt transparency obligations on those systems, they will cease to be used.”

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Knowledge Needed to Prevent Lehman Repeat

By Andrew Haldane, Aurel Schubert and Richard Berne 
January 14, 2015, Financial Times

When Lehman Brothers failed in 2008, it exposed faultlines in the global financial architecture. Many of those have since been recognised and progress made towards closing them, led by the Financial Stability Board under the auspices of the G20 heads of state.

One important but relatively less discussed of those faultlines was a lack of data. It was data gaps that made it nearly impossible for financial regulators and market participants to assess the scale of exposures to Lehman and to the network of Lehman-affiliated firms.

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SEFs Receive a 12-Month Documentation Reprieve

By Rob Daly
Published August 19, 2014 The Trade

Swap execution facility (SEF) operators are breathing a little easier as the Commodity Futures Trading Commission (CFTC), the US derivatives regulator, has given SEFs conditional relief from certain recordkeeping requirements relating to confirmations of uncleared swaps.

The CFTC’s Regulation 37.6(b) states that a SEF is to provide each counterparty to a transaction entered into on or pursuant to the rules of the SEF with a written record of all terms of transactions, which supersedes any previous agreement and serves as the confirmation of the transaction.

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Market Ready if CFTC Mandates Aussie IRS Clearing

By Aaron Woolner
Published August 18, 2014 Asia Risk

Australian market players convinced US regulators are poised to expand their clearing mandate to include Australian dollar interest rate swaps

A potential move by the US Commodity Futures Trading Commission (CFTC) to extend its clearing mandate to include Australian dollar interest rate swaps (IRS) would have little practical impact on the market given the amount of these instruments which are already centrally cleared, according to Marcus Robinson, Australia country head for LCH.Clearnet.

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Germany Finds Emir Enforcement Fix

By Fiona Maxwell
Published August 13, 2014 Risk

Derivatives users in Germany are set to face stricter supervision of their reporting obligations than their counterparts elsewhere, thanks to a unique system that turns external auditors into the eyes and ears of the regulator – and forces companies to pay for the new checks. Lawyers in other countries, including the UK, say it will be next-to-impossible for their own local authorities to enforce the new reporting rules, which came into force as part of the European Market Infrastructure Regulation (Emir) in February this year.

"The new law puts pressure on corporates to ensure they have a proper Emir process – previously, they weren't directly regulated," says Frank Müller, senior manager in the financial services division of KPMG in Germany, one of the firms that will be auditing Emir compliance.

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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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New LME Clearing House Gets BoE 'Settlement Finality Designation'

By Andy Blamey
Published August 13, 2014 Platts

The London Metal Exchange's new clearing house, LME Clear, has received a designation order made by the Bank of England under the Financial Markets and Insolvency (Settlement Finality) Regulations 1999, the exchange said Wednesday.

The designation "relates to LME Clear's secure payment system, which covers payment activities regarding the collection, processing and return of cash and collateral between LME Clear members and the clearing house," the LME said. "All transfers, subject to certain conditions, are deemed final and therefore irrevocable, protecting clearing members, clients and LME Clear."

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Banks Push U.S. Fed to Delay Volcker Rule

By Kanika Sikka
Published August 12, 2014 Reuters

Banks are lobbying U.S. policy makers for a delay of up to seven years from a provision requiring them to sell investments in private-equity and venture-capital funds, the Wall Street Journal reported, citing people familiar with the matter.

Bank officials, trade groups and lawmakers are quietly pressing the Federal Reserve for a multiyear delay of the rule that limits their investments in private-equity and venture-capital funds, the Journal said.

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Regulatory Investments Begin to Turn the Corner

By Rob Daly
Published August 11, 2014 The Trade

Buy-side compliance expenditure will likely ease once regulators finish deploying major market reforms, such as Dodd-Frank, MIFID and EMIR, according to Matthew Gibbs, product manager at technology vendor Linedata, who believes recent reforms have changed internal compliance organisation permanently.

Gibbs dates changes in regulators’ behaviour to the eve of the global financial crisis.

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