Letting clearing of euro-denominated derivatives move from London to New York would leave the UK and Europe in a bad place, UK Economic Secretary to the Treasury Simon Kirby told lawmakers. Kirby says keeping that service in London should be a significant consideration in Brexit negotiations but is unlikely a top priority.
The European Securities and Markets Authority's proposed initial trading obligation is too narrow and threatens derivatives-trading equivalence between the US and the EU, experts say. "I would say equivalence with the US will be much more difficult to achieve, as the question would arise as to why there are material differences for the same currency and product," Clarus Financial Technology CEO Amir Khwaja said.
Over one million financial leaders read SmartBrief SmartBrief helps marketers reach over one million financial business leaders daily. Whether you need to showcase your brand, position your thought leadership, or drive demand, we have an advertising solution to meet the need. Download our Industry Media Kit.
Clearinghouses say that having buy-side firms post their margins directly at central counterparties won't lead to the disintermediation of futures commission merchants. "We have zero plans nor desire to disintermediate the FCMs," says Phupinder Gill, CEO of CME Group.
Ten countries in the EU are looking to add a financial-transactions tax to bonds, stocks and derivatives transactions, but collection costs in Germany alone could hit €8 million due to high trading volume. Costs could range significantly, according to an EU document, with Slovenia estimating €1.5 million to €2 million and Austria estimating implementation costs at less than €1 million.
The Bank of England's proposed changes to the Sterling Overnight Index Average are getting mixed reviews from market participants regarding the payment date of floating legs of London Interbank Offered Rate-Sonia swaps.
Europe's revised Markets in Financial Instruments Directive is "a terrible piece of legislation" and Brexit could prompt changes, Intercontinental Exchange CEO Jeff Sprecher said at a conference. "My advice to the UK is that if they adopt logical [Group of 20] financial-services regulation and have a low-tax environment, people like me -- in fact, all of us on the stage -- we will find a way to do business there," Sprecher said.
Are single-name credit default swaps an efficient risk-hedging tool? How do they affect the supply and price of credit for borrowers? What is their impact on the economy? What role do they play in transmitting risk in the financial system? Please join Christopher Culp, Hal Scott and Mike Johannes for this two-hour afternoon roundtable discussion, followed by a networking reception, Tuesday, Nov. 1.