Asset Classes Industry News

FOA highlights CCP segregation challenges ahead    < 2014-02-28 >

Buy-sidefirms are running out of time to make a decision on account segregation forderivatives clearing, with a written response to clearing members possibly neededas early as next month. Centralcounterparties (CCPs) have applied for re-authorisation under the Europeanmarket infrastructure regulation (EMIR) last year and are now awaitingapproval. Aspart of the new rules, CCPs will need to offer individual client segregation,allowing clearing members to distinguish the assets and positions hel

JSCC offers new client clearing service    < 2014-02-26 >

TheJapan Securities Clearing Corporation (JSCC) has gone live with a Calypsosystem for client clearing of JPY interest rate swaps (IRS) and collateralmanagement. JSCC,a member of the Japan Exchange Group, launched its new service, which includesdrip-feed clearing, real-time integration with members and affiliates forclearing status, request for consent and collateral deposit/withdrawal. Theenhanced service covers clearing of both amortized swaps and accreting swaps,and comes ahead of a clea

SEF rates volumes slump with MAT trading – TABB Group    < 2014-02-28 >

The volume of interest rate swaps (IRS)traded on swap execution facilities (SEFs) dropped significantly in the firstweek of mandatory trading, according to analysis from consultancy TABB Group. Figures compiled sourced from three data providersshow a slide of between 30% and 40% in SEF-traded IRS volumes as participantsadjust to initial ‘made available to trade’, or MAT, requirements that beganlast week, the report has found. This equates to a drop of between US$23billion and US$60 billion in

Cleartrade Exchange and China Beijing Equity Exchange sign accord    < 2014-03-03 >

Singapore’s Cleartrade Exchange (CLTX) and Beijing-basedChina Beijing Equity Exchange (CBEX) have signed a memorandum of understanding, which agrees to share information and develop joint projects.  The shared initiatives are likely to centre on derivatives/futures within thecommodity space. CBEX is the parent company for a number of otherexchanges, including the China Forestry Exchange, China Technology Exchange,China Gold Exchange and China Beijing Environment Exchange. CLTX is a regulate

Volcker compliance “monumental task”, says report    < 2014-02-24 >

Banking entities subject to the Volcker rule, which seeks toreduce systemic risk by limiting banks’ proprietary trading activity, will facesignificant compliance challenges, a report from Woodbine Associates has found. A final Volcker rule was agreed upon in December by the fivekey US financial regulatory bodies involved in its development, more than twoyears after it was initially outlined within the Dodd-Frank Act. The rulelimits the degree to which banks can trade on their own accounts, alt

ISDA calling for benchmark administrator bids    < 2014-02-25 >

The International Swaps and DerivativesAssociation (ISDA) is seeking a benchmark administrator and calculation agent forISDAFIX rates. The association published an invitationto tender this week, marking the latest step in ISDA’s process to align ISDAFIX,a benchmark for annual swap rates for swap transactions worldwide, with best practicein benchmarking. The successful applicant will beresponsible for governance of all ISDAFIX administrative processes includingoversight and decisions of method

IEX eyes Q2 lit market transition    < 2014-02-25 >

A dark pool launched in November could become a lit market by July as it continues to gain market share, crossing its billionth share last week and setting a daily trading record. The billion-share milestone was reached on Friday when the venue set a daily trading record of 41.4 million shares (double counted), suggesting support for the dark pool continues to increase. In January, average order size reached 715 shares, with an average daily volume of 18.1 million shares. Matthew Trudeau, hea

Eris swap futures milestone due to wide appeal    < 2014-02-27 >

Swap futures venue Eris Exchange last weeksurpassed US$10 billion in notional value for its key swaps futures products,which its chief has attributed to the wide appeal of the instruments astraditional swaps trading faces costly regulatory demands. Eris Exchange has doubled its US dollar interestrate swaps futures volume from 50,000 contracts in September to 100,000 thismonth. It is a 400% rise on the January 2012 figure of just over 20,000.  Neal Brady, CEO of Eris Exchange, toldtheTRADEnews

Challenger chooses SuperDerivatives for portfolio revaluation    < 2014-02-26 >

ChallengerLimited, Australia’s seventh largest investment management firm, has pickeddata provider SuperDerivatives to supply it with portfolio revaluation services.  Therevaluation service will provide Challenger with valuations for any basket option, including everyconstituent of the ASX 200 index and their underlying securities. Challenger will also use the serviceprovider’s real-time market data, news and analysis platform DGX, which coversof cash and derivatives data. Challenger is an A

LEIs fail to gain traction    < 2014-02-28 >

Regulators’ mixed messages on the requirement oflegal entity identifiers (LEIs) for trade reporting are believed to be behindweak adoption of the 20-digit identity code. The European Securities Market Authority (ESMA) hassaid the LEI or pre-LEI is not specifically required under the European marketinfrastructure regulation (EMIR), but the UK's Financial Conduct Authority hasinterpreted it differently, saying it may take a harsher line whencounterparties do not comply with the LEI requirement.

Data control tool to aid accurate reporting    < 2014-03-04 >

Dataservice provider Duco has launched a new tool for reference data control,clean-up and reporting to help market participants comply with derivativesregulation. DucoCube Static Control is aimed at making it easier to match static data across internalor external systems, which has become increasingly important because of derivativesrules under the European market infrastructure regulation (EMIR) and the USDodd-Frank Act. Christian Nentwich, CEO of Duco, said the new product was launched as

State Street FCM expands buy-side futures tools    < 2014-03-06 >

State Street has expanded its futures execution and analytics offering to the buy-side within its futures commission merchant (FCM),giving asset managers the ability to connect directly to trading venues andenhance existing algorithmic tools. The offering, through State Street Global Exchange, includesdirect market access (DMA) and support for voice execution for futures andswaps products. The expanded offering means State Street can link executionservices with clearing and collateral services

Technology to ease CFTC budget concerns    < 2014-03-06 >

A greater reliance on technology in the Commodity FuturesTrading Commission’s (CFTC) market oversight function will be critical inhelping the regulator meet its mandate, a former Commission chief economist hassaid, as the process of expanding the Commission’s budget formally begins. The Obama Administration has sought to grant the CFTC a rise in its annual operational budget to US$280 million, from its current level of US$215 million, in a submission toCongress this week that was described by

IRS futures won’t gain widespread momentum    < 2014-03-07 >

New interest rate swap (IRS) futures are failing to gain tractiondespite the lower margin incentive, according to Serge Marston, managingdirector, eCommerce sales, at Deutsche Bank. Although a number of exchanges are now offering swap futures – whichbenefit from trading on exchanges and behave like an OTC instrument – theproducts weren’t attracting widespread demand, Marston told the FIX EMEAconference in London. “In the interest swap market, I don’t think you’ll see huge amounts of changeb

Nasdaq launches private market to ease IPO transition    < 2014-03-05 >

Exchange operator Nasdaq has today launched a US private equitymarket to help non-listed companies raise capital and prepare for IPOs on its main market. Nasdaq Private Market lets companies raise capital and facilitatesecondary transactions through a broker-dealer subsidiary and alternativetrading system. Institutional investors will be able to access capital on theplatform through broker-dealers connected to the platform. In a statement, Nasdaq said it hoped the market would act asa first s

Open access in MiFID II welcomed despite delays    < 2014-03-10 >

The introduction of true competition inderivatives clearing will be positive for the industry, despite a lengthytime-scale for implementation that has attracted criticism, according toCharlotte Crosswell, CEO of derivatives exchange NLX. Among the many changes to numerous marketsthat are set to be introduced as part of MiFID II, open access to derivativesclearing has been one of the most controversial and hotly debated. Following the political agreement inJanuary, European legislators opted t

KRX commences voluntary clearing of OTC derivatives    < 2014-03-11 >

Korea Exchange (KRX) is providing a voluntaryclearing service for Korean interest rate swap contracts in accordance with G20obligations for OTC derivatives clearing. KRX predicts this new service will cutsystematic risks in OTC derivative clearing and improve market transparency. The service has been temporarily offered to 35 exchange members on a voluntarybasis until June 30 2014. After that, all won interest rate contracts have to becleared through KRX on a compulsory basis. KRX say

BNY-BAML tri-party link eases buy-side collateral pressure    < 2014-03-13 >

Asset managers will be able to use corporate bonds ascollateral for centrally cleared interest rate swaps (IRS) after a link-upbetween custodian bank BNY Mellon and Bank of America Merrill Lynch (BAML)through CME Clearing. The arrangement lets BAML, acting as a futures commissionmerchant (FCM) post eligible securities on behalf of buy-side clients into aCME Clearing-controlled tri-party account at BNY Mellon to receive margincredit for listed futures and cleared IRS instruments, under the CME

Derivatives contract re-write lacks buy-side incentives    < 2014-03-14 >

Buy-side firms may be at risk of being sued for negligence ifthey agree to a new derivatives contract being drafted by the InternationalSwaps and Derivatives Association (ISDA). ISDA has been working on amending its master agreement – astandardised and widely used contract for OTC derivatives – for the past year afterpressure from regulators to insert a short-term suspension of terminationrights in the event of a default. The association received a letter from senior regulators,including Ba

Global futures and options volume up 2.1% in 2013    < 2014-03-11 >

Nearly 22 billion futures and options contracts were traded in 2013,an increase of 2.1% from the previous year, but still well below the number ofcontracts traded in 2011 and 2010, according to the Futures IndustryAssociation (FIA). In the FIA’s annual report on futures and options global trends, itfound futures trading accounted for 12.22 billion contracts, just over 56% oftotal industry volume. Trading of options accounted for the other 44%. By category, contractsbased on equity indices and

News Catalog