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February 4, 2013
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Daily coverage for the global derivatives industry

  Top Stories 
  • EU lawmakers might make "precedent-setting" decision on EMIR
    The European Parliament's Economic and Monetary Affairs Committee is set to vote on the European Market Infrastructure Regulation and is expected to reject crucial details of the derivatives reform. The development could be "precedent setting" for the region's policymaking process, experts say. "This is definitely new territory -- this has never happened before," said Tim Gieles, a manager at Cicero. "It's clear the European Parliament wants to take big and bold action." Financial News Online (U.K.) (subscription required) (2/4) LinkedInFacebookTwitterEmail this Story
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  Industry News and Trends 
  • ICE targets default risk with credit-swaps futures, sources say
    IntercontinentalExchange intends for credit-swaps futures it has in the works to protect investors from default by underlying borrowers, sources say. The contracts, which might be available in April, are expected to involve companies that are current on debt payments. The credit-swaps futures reportedly will reference Markit Group indexes. Bloomberg Businessweek (2/1) LinkedInFacebookTwitterEmail this Story
  • Possible LBO trend threatens bond investors
    An uptick in leveraged buyouts may be bad for corporate-bond investors. After years of relatively low activity, buyout risk has returned to the market as eurozone instability and U.S. regulatory risk have fallen to their lowest levels in years. As the potential for buyouts grow, institutional investors are increasingly looking to hedge their risks with credit default swaps or avoiding bonds with buyout risks altogether. The Wall Street Journal (2/3) LinkedInFacebookTwitterEmail this Story
  • Traders fret that ICE-Liffe merger would be costly for them
    A proposed takeover of NYSE Liffe by IntercontinentalExchange has some Liffe commodities brokers and traders concerned, especially about higher trading fees and a near monopoly. Liffe and ICE handle the majority of derivatives trading in sugar, coffee and cocoa. Reuters (2/1) LinkedInFacebookTwitterEmail this Story
  • U.K. fended off EU review of LSE's takeover bid for LCH.Clearnet
    France, Spain and Portugal tried to get the EU to delay the London Stock Exchange's takeover of 60% of LCH.Clearnet Group in December, but the U.K.'s Office of Fair Trading opposed the calls for an investigation and the European Commission declined to get involved, Aoife White writes. Bloomberg (2/1) LinkedInFacebookTwitterEmail this Story
  • Regulations to undercut swaps market, buy-side traders say in survey
    About 70% of buy-side traders say over-the-counter derivatives rules will reduce liquidity and volumes in the swaps markets, a UBS survey indicates. Half of the respondents said they are likely to transact more swaps business in the futures markets, citing stronger liquidity, better execution costs and lower capital and margin mandates. The Trade News (U.K.) (2/1) LinkedInFacebookTwitterEmail this Story
  Regulatory Roundup 
  • U.K. is expected to let regulators break up banks
    U.K. Chancellor George Osborne is set to announce today that banks will be dismantled if they fail to protect retail banking from risky investment business. Osborne is expected to go further than ring fencing. "We're not going to repeat the mistakes of the past," according to his speech. "In America and elsewhere, banks found ways to undermine and get around the rules. We could see that again -- so we are going to arm ourselves in advance. In the jargon, we will 'electrify the ring fence.' " The Wall Street Journal (2/3) LinkedInFacebookTwitterEmail this Story
  • Europe's proposed transaction tax is finding more critics
    Experts and industry groups are increasingly voicing opposition to a proposed tax on financial transactions in Europe. Noel Amenc, an EDHEC Business School professor, told EU Internal Market Commissioner Michel Barnier in a letter that the tax would increase the price of capital. "The theoretical arguments in support of [financial-transaction tax] as a measure to reduce volatility are, at best, mixed," Amenc wrote. The European Commission is scheduled to present a plan Feb. 14. Financial News Online (U.K.) (subscription required) (2/1), Bloomberg (2/1) LinkedInFacebookTwitterEmail this Story
  • 5 Italian banks face derivatives-trade scrutiny
    Monte dei Paschi, UniCredit, Intesa Sanpaolo, BNL and Credem have been under investigation at least a year regarding derivatives trades. The inquiry originated in Trani, Italy, and concerns possible usury and fraud by more than 20 people, sources say. Reuters (2/1) LinkedInFacebookTwitterEmail this Story
Never assume the obvious is true."
--William Safire,
American author, columnist and presidential speechwriter

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