Industry concerns remain as euro clearing decision approaches | Report: ETF/ETP industry larger than hedge funds | Deutsche Bank reportedly urged to prepare for hard Brexit
May 19, 2017
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Industry concerns remain as euro clearing decision approaches
Simon Puleston Jones, FIA's head of Europe, says enhanced oversight of euro-denominated clearing would be preferable to forced relocation, which could affect firms located in continental Europe. The European Commission is expected to announce a recommendation on the issue next month, while Deutsche Boerse's Niels Tomm supports relocating euro-clearing to the eurozone because of cross-border equivalence regime "deficiencies."
Reuters (5/18),  Risk (subscription required) (5/18),  Financial Times (tiered subscription model) (5/18),  Financial Times (tiered subscription model) (5/19) 
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Report: ETF/ETP industry larger than hedge funds
The global exchange-traded fund and exchange-traded product industry outpaced the global hedge fund industry at the end of the first quarter by $847 billion, according to an ETFGI report. The ETF/ETP industry had $3.913 trillion in assets, compared with hedge funds' $3.066 trillion.
Nasdaq (5/18) 
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Deutsche Bank reportedly urged to prepare for hard Brexit
European regulators have called on Deutsche Bank to prepare contingency plans in case of a hard Brexit, in which Britain would leave the EU without a robust deal in place on future trade and cross-border banking, a source said. This eventuality would complicate derivatives dealings, which are predominantly cleared in London, and Deutsche Bank's high exposure to that sector would make it especially vulnerable.
Reuters (5/18) 
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France considers revamping laws to attract UK firms
In a move to attract more financial firms leaving the UK after Brexit, French officials are considering using English law for contracts signed in France.
Financial Times (tiered subscription model) (5/18) 
Regulatory Roundup
Japan tightens HFT regulations
Japan passed a law that will require high-frequency trading companies to register with regulators. Japan's Financial Services Agency had previously called for HFTs to register in an effort to improve risk management.
Reuters (5/19) 
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White House not planning to break up big banks, Mnuchin says
Mnuchin opposes big bank breakup
Mnuchin (Tasos Katopodis/Getty Images)
The Trump administration has no plans to break up big banks, Treasury Secretary Steven Mnuchin told the Senate banking committee Thursday. Breaking up Wall Street's biggest banks would negatively affect liquidity and the economy, he said.
Bloomberg (5/18),  The Wall Street Journal (tiered subscription model) (5/18),  Financial Times (tiered subscription model) (5/18) 
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Industry Developments
ECB official warns about calm market conditions
ECB official warns about calm market conditions
Coeure (Vladimir Simicek/AFP/Getty Images)
European Central Bank official Benoit Coeure has warned of a disconnection between currently calm market conditions and brewing political turbulence, which he says could provoke a major market correction.
Financial Times (tiered subscription model) (5/18) 
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Options Clearing's Donohue discusses post-trade transformation
In this podcast, Craig Donohue, executive chairman and CEO of the Options Clearing Corp., offers insight into his return to the derivatives industry and the transformation of the post-trade realm. Donohue also discusses regulatory changes and market structure.
The Options Insider (5/17) 
Financial Technology
BNP Paribas backs communications system Symphony
BNP Paribas has injected $63 million in Symphony, a communications platform that will ultimately replace email and voice systems. Symphony Communication Services has already attracted significant investments from a consortium of major financial institutions.
The Trade (UK) (5/18) 
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Commodities and Managed Futures
China to encourage more commodities trading
The China Securities Regulatory Commission is looking at opening futures contracts for a wide range of commodities and raw materials in an effort to encourage more foreign trade and investment, with individual Chinese exchanges also making similar plans. The move is seen as part of China's long-term plan to be more influential in global price setting.
Bloomberg Professional Services (5/24) 
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FIA News
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