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January 11, 2013

Daily coverage for the global derivatives industry

Top Stories

ISDA/Markit win Risk's back-office tech product of the year award
ISDA and Markit Counterparty Manager produced the ISDA Amend program late in 2012 to help firms comply with the Commodity Futures Trading Commission's new regulations defining swaps trades. According to ISDA's general counsel, Katherine Darras, "Without technological assistance, there is no way the dealers could cope with the documentation burden," and that's what ISDA Amend provides. Risk.net (subscription required) (1/10)

CFTC to hold meeting on futurization
The Commodity Futures Trading Commission plans to hold a meeting on Jan. 24 to hear complaints that new rules unfairly favor futures over swaps, CFTC member Scott O'Malia says. The CFTC also is considering a block-trade rule that could accommodate some of the industry concerns, O'Malia said. Reuters (1/10)

Industry News and Trends

MexDer sees renewed interest in its swap futures
Mercado Mexicano de Derivados, Mexico's derivatives exchange, has been offering its variant of swap futures since early 2011. "When we launched it, there was a lot of activity, but during 2012 the market was really trying to do as much as possible in the [over-the-counter] space, so we saw declining volumes," MexDer CEO Jorge Alegria says. CME Group announced in September that it plans a futures version of its OTC interest-rate swaps. "Now, with the CME announcement, we have started to get a lot of new calls," Alegria said. Risk.net (subscription required) (1/10)

Citi strikes deal with depositories to cover collateral needs
Citi says it has reached collateral agreements with Clearstream and Euroclear, two global central securities depositories. New rules require swaps traders to supply a greater amount of margin to central-clearing partners than previously required. The Trade News (U.K.) (1/10)

2012 marked derivatives shift
Last year ended with many top derivatives markets showing lower volume than previous years. Conversely, volume on exchanges in developing markets across the globe increased. FOIntelligence.com (subscription required) (1/10)

Regulatory Roundup

Market keeps close eye on France's transaction-tax regime
France took the lead in Europe by introducing a tax on some financial transactions, but it created a loophole by not including derivatives. Italy is expected to close the loophole with a broader transaction tax, and dealers are concerned that a broader tax is in store for other European nations as well. Risk.net (subscription required) (1/10)

FBI doggedly pursues Libor cases -- from Washington, D.C.
The FBI's Washington, D.C., field office is driving the U.S. investigation into the London Interbank Offered Rate scandal and other benchmark rigging. "We've got an enormous amount of resources devoted to this," said Timothy Gallagher, head of the Washington criminal division, who is overseeing the probe. "People think that financial fraud is pursued in New York, but we're pursuing it vigorously here," Gallagher said. "There's more than enough to go around." Bloomberg (1/10)

Former bank officials say they were unaware of Libor issues
The former CEO of UBS, Marcel Rohner, told a U.K. parliamentary committee Thursday that he and other former top executives at the company did not know about the problems with the London Interbank Offered Rate while employed at the bank. Tracey McDermott, the U.K.'s Financial Services Authority's enforcement chief, said she was surprised by that assertion because her agency began requesting information on the matter during the executives' tenure. Financial Times (tiered subscription model) (1/10), The Wall Street Journal (1/10)

Bank in talks with regulators over Libor issues
The fate of two Royal Bank of Scotland executives hangs in the balance in the bank's discussions with regulators over alleged benchmark rate rigging. Sources say the UK's Financial Services Authority is pressuring the bank to dismiss one or more executives as a token of its seriousness about reform. The Wall Street Journal/Corruption Currents blog (1/10), Reuters (1/10)

SmartQuote

Things which matter most must never be at the mercy of things which matter least."

--Johann Wolfgang von Goethe,
German writer, artist and politician

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