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January 9, 2013

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Daily coverage for the global derivatives industry

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Fed might ease derivatives regulation for foreign banks
The Federal Reserve is considering letting major non-U.S. banks sidestep regulatory changes intended to prevent taxpayers from subsidizing derivatives trading. Financial Times (tiered subscription model) (1/8)

Custodian bank debuts central securities depository
Bank of New York Mellon will offer a central securities depository in Belgium after gaining regulatory approval. With CSD status, BNY Mellon will be able to help institutional investors access collateral to comply with margin obligations. The Trade News (U.K.) (1/8), Financial News Online (U.K.) (subscription required) (1/8), Financial Times (tiered subscription model) (1/7), Zacks/Analyst Blog (1/8)

Margin Savings up to 90% for Cleared OTC IRS vs. Futures
90% is no small number - especially when it comes to margin savings. Market participants have been actively utilizing portfolio margining of Cleared OTC IRS and Eurodollar and Treasury futures, and total risk reductions now account for over $1 billion in initial margin savings - figures that remain unparalleled in the industry. Click here to learn more.

Industry News and Trends

Nasdaq, NYSE likely will delay "circuit breakers" launch
Nasdaq OMX Group and NYSE Euronext notified customers this week that "circuit breaker" measures intended to prevent significant market swings might be delayed to April 8 to give firms more time to adjust. The measures, originally scheduled to go into effect in early February, are a response to the 2010 "flash crash." The Wall Street Journal/Dow Jones Newswires (1/7)

Euribor contributors might exit amid difficulty and liability
Rabobank Groep's departure from contributing to the Euro Interbank Offered Rate might spark a wider exit, said Cedric Quemener, director of Euribor-EBF. Rabobank says a decline in interbank lending has made it difficult to calculate the benchmark, and others note the legal liability and regulatory burden associated with it. Bloomberg (1/8)

Singapore Exchange tightens risk management
Singapore Exchange says it has allocated more funds to its two clearinghouses and has increased transparency in a general tightening of its risk management. The moves may clear the way for banks in the U.S. and Europe under new regulatory requirements to be members of SGX's clearinghouses. Reuters (1/8)

Feldstein wins both sides of derivatives trade
Andrew Feldstein, head of BlueMountain Capital Management, is the big winner of the most-discussed derivatives trades of 2012. After betting against the "London whale," Feldstein helped JPMorgan Chase unwind trades from which he benefited, sources say. Bloomberg/Bloomberg Markets magazine (1/8)

Bank's group gets around vow to halt proprietary trading
Multi-Strategy Investing, a Goldman Sachs group, is wagering about $1 billion of the company's money on stocks and bonds, despite the bank's recent assurance that it no longer engages in such activity, say sources who worked for or with MSI. Bloomberg (1/8)

Regulatory Roundup

Lew reportedly is likely choice for U.S. Treasury chief
White House Chief of Staff Jack Lew might succeed Timothy Geithner as Treasury secretary, sources say. Lew is said to have helped supervise White House strategy during budget negotiations while keeping Wall Street executives up to date. Bloomberg (1/8)

SmartQuote

Memory is a complicated thing, a relative to truth, but not its twin."

--Barbara Kingsolver,
American novelist, essayist and poet

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