The Commodity Futures Trading Commission and the Securities and Exchange Commission have agreed on dual supervision of single-name credit default swaps, which will let single-name CDS clearing be done under CFTC rules. According to sources, "while the SEC is formulating its rules, the CFTC could extend its supervision of CDS indexes and the clearinghouses it governs to include single-name CDS."
The 10th anniversary of the fall of Bear Stearns comes as the banking lobby pushes for a loosening of regulations that came in response to the 2007 financial crisis, according to Phil Angelides, the chairman of the Financial Crisis Inquiry Commission. "The only missing ingredient for another crisis is Wall Street excess -- as sure to come as the sun is to rise," Angelides writes.
Bank of England (Daniel Leal-Olivas/AFP/Getty Images)
The Bank of England is setting a higher bar for capital at major banks for this year's stress test. The higher standard is based on "additional costs [systemic banks'] failure would impose on the wider economy," the central bank says.
US firms might be unaware of the effect of the EU General Data Protection Regulation, says Andra Purkalitis of Bovill. The regulation, which expands individuals' control of their data, has implications outside the EU and takes effect May 25.
Compliance demands are eating up the time of sell-side traders, prompting them to neglect customer service. A survey by Greenwich Associates finds that many traders are interacting with compliance teams on a daily basis.
Marex Solutions has created a structured note linked to the FTSE 100 index that is registered, cleared and settled using distributed-ledger technology. Marex is partnering with Nivaura, a startup specializing in blockchain technology, and ResonanceX, an investing platform founded by a former managing director of JPMorgan Chase.
Equity gains could be sapped by volatility, warn Goldman Sachs strategists. "This moderation in risk-adjusted returns has begun to play out quickly, in particular due to the low-vol regime fading and equity/bond return correlations becoming positive," said a note by Goldman.
The $2 trillion commodity-trading industry has 4.2% female representation in senior leadership, with none at Glencore, Vitol Group and Trafigura Group, according to statistics from the 40 largest commodity-trading firms. Commodity trading can be intimidating because "the set of survival skills needed is similar to that of a lion tamer going into the lion's cage," former commodity strategist Roxana Mohammadian-Molina says.
Securities and Exchange Commission Chairman Jay Clayton urges exchanges not to "dilly around" on compliance with the consolidated audit trail, though he has not indicated enforcement action will occur. "The main markets regulator should have access to a forensic trail that enables us to assess what happened if a market event occurred," he says.
The Securities and Exchange Commission has agreed to pay more than $83 million to three Merrill Lynch insiders who gave information that helped the SEC reach a $415 million settlement with Bank of America in 2016, their lawyer says. The whistleblower payout is the largest ever by the SEC.
UK Chancellor Philip Hammond is expected to unveil a financial-technology strategy Thursday. The plan includes a task force involving the Bank of England, the Financial Conduct Authority and the Treasury.