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November 5, 2012
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Daily coverage for the global derivatives industry

  Top Stories 
  • ICE aims to clear sovereign-debt CDS of 5 European nations
    IntercontinentalExchange has sought approval from the Securities and Exchange Commission to back credit default swaps contracts on the debt of Greece, Ireland, Italy, Portugal and Spain. The move is intended to limit systemic risk. ICE has a history of backing sovereign-debt CDS, handling those for Argentina, Brazil, Mexico and Venezuela. Bloomberg Businessweek (11/2) LinkedInFacebookTwitterEmail this Story
  • Asian-Pacific clearers face challenges and opportunities
    Australia, Hong Kong, South Korea, Japan, Singapore and India have vowed to develop clearinghouses for over-the-counter derivatives, as policymakers prepare to implement the Group of 20 nations' reform agenda. Experts say clearinghouses in the region will face significant competition from established, international counterparts. However, bankers see possible niches for Asian-Pacific clearers. Financial News Online (U.K.) (subscription required) (11/5) LinkedInFacebookTwitterEmail this Story
  Industry News and Trends 
  • Firms seek clarity on U.S. swaps rules
    Reforms of the U.S. swaps market have many firms simply trying to understand how to meet requirements, Brian Scheid writes. "We've done a lot of analysis and preparation to try and make sure that we comply with all the requirements, interpret them correctly and manage the best we can for our customers. There's just not enough clarity there, and it makes it challenging for businesses," said Patrice Gorton of Avista, an electric utility. Platts/The Barrel blog (11/2) LinkedInFacebookTwitterEmail this Story
  • CDS on Sharp's debt climb
    Credit default swaps covering Sharp's debt indicate a 94.9% chance of default, as the yen's rise hits Japanese electronics firms. "It won't be easy for Japanese electronics companies to recover because the center of gravity in the industry is shifting to developing Asia," said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank. Bloomberg (11/5) LinkedInFacebookTwitterEmail this Story
  • Volume on China's futures markets rises almost 19%
    Transaction volume on China's futures markets reached $21.39 trillion in the first 10 months of this year, an 18.84% increase compared with the same period in 2011, the China Futures Association said. All of the growth was on the Dalian Commodity Exchange, China's biggest futures market for agricultural products, and the China Financial Futures Exchange, which trades financial derivatives. (China) (11/4) LinkedInFacebookTwitterEmail this Story
  Regulatory Roundup 
  • European ban on naked CDS could hit currency market
    The EU's ban on naked credit default swaps went into effect last week, after politicians argued that such swaps contributed to the eurozone's debt crisis. The ban could affect the currency market, which some use as a way to bet on the future of the region. "Traders and investors who want to bet against [the Economic and Monetary Union] might just transfer their activity to another market that's not subject to any restrictions -- such as the euro," said Steve Barrow, Standard Bank's head of foreign exchange strategy. (U.K.) (10/26) LinkedInFacebookTwitterEmail this Story
  • G-20 needs to enforce Basel III, Mexican official says
    Manuel Valle, head of the Mexican finance ministry's banking unit, said the Group of 20 nations should develop enforcement mechanisms for nations that fail to implement Basel III rules by year-end. "If these measures were agreed upon at the G-20 level, we have to find mechanisms within the G-20 to require that everyone complies with them," Valle said. That could include sanctions for noncompliance, he said. Bloomberg (11/4), Reuters (11/4) LinkedInFacebookTwitterEmail this Story
  • U.S. iron-ore swaps regulation hits Singapore Exchange
    The Singapore Exchange has not registered with the Commodity Futures Trading Commission, so U.S. iron-ore swaps traders are being told to no longer use the exchange, the prime clearer of such swaps. Some say the stance could affect liquidity. It is estimated that U.S. customers make up about 10% of the iron-ore swaps on the SGX. Reuters (11/2) LinkedInFacebookTwitterEmail this Story
  • Commentary: Dodd-Frank expanded the too-big-to-fail pool
    Gretchen Morgenson writes that clearinghouses, such as Chicago Mercantile Exchange and IntercontinentalExchange, got a bonus from the Dodd-Frank Act -- they are allowed to tap taxpayer money if they get into trouble. Morgenson pulls from a book by former Federal Deposit Insurance Corp. chief Sheila Bair, who wrote that the clearinghouses "were drooling at the prospect of having access to loans from the Fed. I thought it was a terrible precedent and still do. It was the first time in the history of the Fed that any entity besides an insured bank could borrow from the discount window." The New York Times (tiered subscription model) (11/3) LinkedInFacebookTwitterEmail this Story
Mere longevity is a good thing for those who watch life from the sidelines. For those who play the game, an hour may be a year, a single day's work an achievement for eternity."
--Gabriel Heatter,
American radio commentator

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