LSE moves to establish swaps-trade repository | ICE and DTCC work to become European trade repositories | CME plans European road show to discuss industry changes
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29 March 2013
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Morning Bell
EU is urged to implement creditor-writedown rules for bank failures
Germany, Denmark, Finland and the Netherlands say the EU should phase in by 2015 rules governing creditor writedowns when banks collapse, three years earlier than proposed. The calls come amid Cyprus' rescue, which includes losses for senior creditors and depositors. Bloomberg (28 Mar.)
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Industry News
LSE moves to establish swaps-trade repository
The London Stock Exchange has applied to the European Securities and Markets Authority to launch UnaVista, a swaps-trade repository for all asset classes. Approval is expected by June, the LSE says. According to the European Market Infrastructure Regulation, reporting of swaps trades must start 90 days after ESMA authorises the first repository. The Trade News (U.K.) (28 Mar.)
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ICE and DTCC work to become European trade repositories
IntercontinentalExchange and Depository Trust & Clearing say they have applied to become EU trade repositories. If the European Securities and Markets Authority approves the applications, the companies will compete with REGIS-TR, a joint venture between Spain's Iberclear and Deutsche Boerse-owned Clearstream. Reuters (28 Mar.)
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CME plans European road show to discuss industry changes
CME Group is holding meetings in a dozen European cities, aiming to ramp up its business as rival IntercontinentalExchange pursues a merger with NYSE Euronext. CME executives discuss the changing regulatory landscape in Europe and the US, clearing of over-the-counter derivatives and the company's London exchange, says William Knottenbelt, head of operations in Europe, the Middle East and Africa. Bloomberg (28 Mar.)
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Australian dollar- and yuan-denominated bonds see strong demand
Bonds denominated in China's renminbi and the Australian dollar are seeing unusually high demand as global investors search for yield in currencies correlated to the US dollar, analysts say. Such correlation is tempting investors to look at assets denominated in the Chinese and Australian currencies, which provide greater yield than domestic equivalents denominated in the US dollar. Reuters/International Financing Review (28 Mar.)
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Regulatory Roundup
Covered bonds are considered highly liquid in CRD IV draft
The latest draft of the EU's Capital Requirements Directive IV puts certain covered bonds in the highest class of liquidity. Inclusion of "covered bonds traded on transparent markets with ongoing turnover" would mean banks could hold as much as they wish without a haircut on asset value. Reuters/International Financing Review (28 Mar.)
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OECD recommends more monetary easing from ECB
The Organisation for Economic Cooperation and Development suggests that the European Central Bank consider more quantitative easing to bolster growth. "There is a strong case to ease monetary policy further, given weak demand and inflation well below the ECB's objective," according to the OECD. "More specific forward guidance could be given by the ECB. Further thought should be given to how to expand quantitative easing." Bloomberg (28 Mar.), The Wall Street Journal (28 Mar.)
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EU looks to toughen oversight of money market funds
EU regulators might require money market funds to retain a minimum level of liquid assets and conduct internal stress tests as part of increased supervision of the industry. Internal Market Commissioner Michel Barnier has identified oversight of the money market fund industry as key to curbing shadow banking. Bloomberg (28 Mar.)
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FSA reportedly wants more clearing testing of Nasdaq's NLX
Nasdaq OMX Group's European derivatives market, NLX, must delay its opening because the UK Financial Services Authority is not convinced of its clearing setup and wants more testing, sources say. NLX, which is in London, was scheduled to go live on 12 April. Bloomberg (28 Mar.)
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Spotlight on China
China aims to rein in wealth-management products
Chinese authorities are working to toughen regulation of wealth-management products, which are wildly popular but pose risk to the financial system. The China Banking Regulatory Commission has told banks that the products must be clearly linked to specific assets. The Wall Street Journal (27 Mar.)
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GFMA News
GFMA Asian webinar: "Global LEI Developments and Deadlines" -- 3pm Hong Kong time on 8 April
Join us for the next installment of GFMA's webinar series to help financial-market participants prepare for the critical implementation of a global legal-entity identifier. Recently, there have been important developments from the US Commodity Futures Trading Commission, global regulators and the LEI Regulatory Oversight Committee. Further, important deadlines under the CFTC's reporting and record-keeping rule for swaps are quickly approaching. Participate in this timely webinar to receive expert summary and analysis of the latest regulatory developments and initiatives. The next webinar is co-hosted by GFMA and the Hong Kong Investment Funds Association and is scheduled at 3pm Hong Kong time for Asian market participants.
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AFME News
Early-bird registration is open: AFME 6th Annual European Post-Trade Conference
Registration is open for AFME's 6th Annual European Post-Trade Conference, scheduled on 23 May at the Lancaster London hotel. This event brings together eminent speakers from across the industry, including senior operations executives and key regulators, and offers insights into crucial developments in the post-trade space and their impact on the industry.

Register to secure your place.
  • Early-bird member rate (available until 11 April): £299
  • Early-bird nonmember rate: (available until 11 April): £609
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SmartQuote
It is impossible to live pleasurably without living prudently, and honourably, and justly; or to live prudently, and honourably, and justly, without living pleasurably."
-- Epicurus,
Greek philosopher
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