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December 5, 2012
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  Top Stories 
  • ESMA's Ross indicates delay with derivatives reform
    European market participants likely won't face mandatory derivatives clearing before mid-2014, Verena Ross of the European Securities and Markets Authority said at an industry conference in a signal of a further delay to the global timetable for derivatives reform. Ross also said the buy side should make itself heard more in rule creation. "The buy side has historically only posted collateral, but under the new [over-the-counter] derivatives rules, ESMA is supportive of a two-way system, where collateral moves both ways," she said. The Trade News (U.K.) (12/4), Financial Times (tiered subscription model) (12/4) LinkedInFacebookTwitterEmail this Story
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  Regulatory Roundup 
  • Global regulators vow to fix derivatives-rule problems
    Regulators worldwide recently met in New York and identified potential problems with derivatives rules. "We have identified various potential conflicts, inconsistencies, and duplicative requirements within our respective contemplated rules and we will continue to discuss measures to ameliorate the challenges they raise," the regulators said in the joint statement. For example, the regulators will strive to minimize issues arising from extraterritoriality. Jones Newswires (12/4), Reuters (12/4) LinkedInFacebookTwitterEmail this Story
  • SEC approves MIAX Options Exchange
    The MIAX Options Exchange has gained regulatory approval from the Securities and Exchange Commission and is scheduled to begin trading Friday. "The approval of the MIAX Options Exchange is a significant milestone. We are excited to enter into the U.S. options space and commence trading," said Thomas Gallagher, chairman and CEO of the exchange. Bloomberg (12/4) LinkedInFacebookTwitterEmail this Story
  • HKMA discusses possible charge for trade reporting
    Participants in the over-the-counter derivatives market might face a charge to use the Hong Kong Monetary Authority's trade-reporting service once it's operational. Discussions with market players are under way and are expected to continue for months. However, Esmond Lee, executive director for financial infrastructure, says "the HKMA has not yet decided whether to charge and, if so, the level of charges." (subscription required) (12/4) LinkedInFacebookTwitterEmail this Story
  • Other News
  Industry Developments 
  • LCH.Clearnet overhauls SwapClear's margin model
    Users of LCH.Clearnet's interest-rate-swaps clearing service say its collateral calls were not high enough, causing risk to be covered by contributions to its default fund; the comments have prompted LCH.Clearnet to revamp SwapClear's margin model. The U.K.'s Financial Services Authority is reviewing the revised model, but it might be months before it is approved. (subscription required) (12/5) LinkedInFacebookTwitterEmail this Story
  • Most MF Global claims have been resolved, trustee says
    James Giddens, the trustee charged with liquidating MF Global, has issued a report noting that nearly all 28,000 claims from customers have been resolved, with about 200 remaining. "The resolution of so many claims in such a short period has allowed clarity with respect to both the possibilities of, and impediments to, further distributions," Giddens said in an interim report filed in U.S. Bankruptcy Court. Bloomberg Businessweek (12/5), Reuters (12/4) LinkedInFacebookTwitterEmail this Story
  • Other News
  Electronic Trading News 
  • Commentary: HFT study doesn't look at value of liquidity
    A study co-written by the chief economist at the Commodity Futures Trading Commission delves into the profits of high-frequency traders, focusing on the costs to other investors, but it doesn't consider the benefits HFT has on the market, John Carney writes. "[B]ecause the study is limited to HFT profits, it doesn't take in account the value of liquidity provision," Carney writes. CNBC (12/4) LinkedInFacebookTwitterEmail this Story
  Commodities and Managed Futures 
  • Olam's reversal on debt markets signals trouble, Muddy Waters says
    Olam International's CEO said last week that his company had sufficient enough cash to keep it from tapping the debt markets for five or six months, but on Monday, Olam said it was issuing $750 million of 6.75% five-year bonds. Short-seller Muddy Waters said Tuesday that Olam's reversal bolstered its opinion that the Singapore commodities trader was close to collapse. It stuck with its "strong sell" position. Reuters (12/3) LinkedInFacebookTwitterEmail this Story
  FIA News 
  • Singapore official comments on OTC reforms at FIA Asia Conference
    Derivatives regulators in Asia face several challenges specific to the region when implementing the global derivatives reforms, Lee Chuan Teck, assistant managing director at the Monetary Authority of Singapore, said in a Sept. 28 speech at the annual FIA Asia conference in Singapore. Lee also stressed the importance of resolving cross-border conflicts for focusing on achieving “broadly similar regulatory outcomes” rather than identical rules and regulations. Lee added that MAS expects OTC trade reporting requirements to take effect in Singapore in the third quarter of 2013, and said the trade data will help the agency formulate its clearing requirements. LinkedInFacebookTwitterEmail this Story
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The forceps of our minds are clumsy things and crush the truth a little in the course of taking hold of it."
--H.G. Wells,
British author

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