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February 7, 2013

Daily coverage for the global derivatives industry

Top Stories

European Parliament could still approve derivatives rules
The European Parliament Economic and Monetary Affairs Committee voted against technical standards on over-the-counter derivatives and central counterparties, but the rules might still be approved by Parliament. The committee based its decision on a belief that the European Securities and Markets Authority had misinterpreted a portion of the law that mandates the rules, but Parliament might approve them anyway to avoid a lengthy rewrite. Meanwhile, a French market regulator is urging European lawmakers to approve the rules. Risk.net (subscription required) (2/6), Reuters (2/6)

Bank agrees to $612M penalty to settle Libor charges
Royal Bank of Scotland has agreed to settle allegations that it manipulated the London Interbank Offered Rate. The bank will pay $325 million to the Commodity Futures Trading Commission, $150 million to the U.S. Justice Department and about $137 million to the U.K. Financial Services Authority. Reuters (2/6), The New York Times (tiered subscription model)/DealBook blog (2/6), Financial Times (tiered subscription model) (2/6), The Wall Street Journal (2/7)

Industry News and Trends

Rate swaps are successfully cleared at Eurex
Deutsche Boerse's Eurex Clearing has successfully cleared interest-rate swaps for two European buy-side companies, one from London and the other from Paris. Eurex launched clearing for rate swaps in November. The Trade News (U.K.) (2/6)

TAIFEX-Eurex deal offers access to Taiwanese derivatives
European traders will gain access to Taiwanese derivatives under a strategic alliance between Eurex Exchange and the Taiwan Futures Exchange. Eurex plans to list options and futures from TAIFEX this year, expanding the latter's reach. "The partnership with Eurex is part of our strategy to sustain the competitiveness in the fast-changing global derivatives market," TAIFEX Chairman Tony Fan said. The Trade News (U.K.) (2/6), The Wall Street Journal/Dow Jones Newswires (2/6)

Regulatory Roundup

Bankers view Lew as an unknown commodity
Financial executives are raising questions about President Barack Obama's nominee for Treasury secretary, Jack Lew. Industry players say they're concerned about Lew's stance on regulatory changes, many of which are included in the Dodd-Frank Act. Lew is expected to face confirmation-hearing questions on how he would handle his position as chief of the Financial Stability Oversight Council. The Hill/On the Money blog (2/6)

CFTC and FERC fight over punishing traders
The Commodity Futures Trading Commission and the Federal Energy Regulatory Commission are fighting a turf battle over who has the right to punish Brian Hunter, formerly a trader at Amaranth Advisors. The CFTC and Hunter say FERC overstepped its bounds in issuing a $30 million fine for bad gas-futures bets. The CFTC has paused an investigation of Hunter to join in his defense against FERC. Reuters (2/6), Bloomberg (2/7)

Germany pushes ahead with ring fence
Germany is forging ahead with plans to separate investment and retail banking. "The precarious situation of single banks shouldn't be able to threaten the stability of the financial system," German Finance Minister Wolfgang Schaeuble said. The Wall Street Journal (2/6)

Commentary: Financial-transaction tax is needed in U.S.
Congress should consider implementing a tax on financial transactions to raise funds while affecting relatively few Americans and hindering high-frequency trading, writes Jesse Eisinger of ProPublica. The New York Times (tiered subscription model)/DealBook blog (2/6)

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