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June 26, 2012
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  Top Stories 
  • Futures exchanges aim to capitalize on regulatory changes
    Futures exchanges around the world are preparing to take advantage of regulatory changes, particularly a push toward swaps clearing in Europe. "It is one of the few structural growth areas in financial markets," said Richard Perrott, an analyst at Berenberg Bank. Executives from the futures industry are meeting this week in London at the International Derivatives Expo. Reuters (6/25), Yorkshire Post (England) (6/26) LinkedInFacebookTwitterEmail this Story
  • Volume of centrally cleared interest-rate swaps surges
    Funneling of buy-side interest-rate swaps through central clearing has surged, according to this analysis. LCH.Clearnet said last month that its SwapClear platform has cleared more than $1 trillion of the instruments. Since Jan. 1, such activity at SwapClear is up 274%. The Chicago Mercantile Exchange also reported significant growth in the first half of this year in interest-rate swaps. Hedgeweek (London) (6/25) LinkedInFacebookTwitterEmail this Story
  Regulatory Roundup 
  • ESMA releases draft rules for derivatives overhaul
    The European Securities and Markets Authority published draft measures that aim to improve the transparency and safety of the derivatives market. The rules are subject to public feedback and are expected to be finalized in September, ahead of a December global deadline. Among the proposals: No clearinghouse would have to process a contract that exceeds its ability to manage it. However, clearinghouses would be required to cover losses when a member is unable to meet its obligations. Reuters (6/25), Bloomberg (6/25), The Trade News (U.K.) (6/25) LinkedInFacebookTwitterEmail this Story
  • Banks raise concerns about "counterparty exposure" proposal
    The Federal Reserve last year proposed rules intended to prevent too much interconnectedness among financial firms. The "counterparty exposure" rules, which were mandated by the Dodd-Frank Act, face opposition from Wall Street, which says the proposal overstates the risks and could hurt markets. Reuters (6/26) LinkedInFacebookTwitterEmail this Story
  • Opinion: Regulators should tread lightly when it comes to hedging
    While it has been debated whether the Volcker rule could have prevented JPMorgan Chase's recently announced trading loss, the real question is: How can regulators tell if a bank is engaging in hedging? "Hedging is a subtle and complex art, and supposedly risk-mitigating activities can lead to exposures that are instead risk-enhancing," writes Pace University professor Aron Gottesman. The Hill/Congress Blog (6/25) LinkedInFacebookTwitterEmail this Story
  • Other News
  Industry Developments 
  • Group tasked with reviewing Libor reportedly resists revamp
    In March, the British Bankers' Association established a group of bankers and regulators to review the London Interbank Offered Rate and how it is determined, in the wake of a worldwide investigation. The group is resisting calls to revamp the way Libor is set because structural changes could invalidate a significant number of contracts, sources said. Some industry experts are questioning that stance. Bloomberg (6/26) LinkedInFacebookTwitterEmail this Story
  • BoE's collateral commitment gives swaps dealers hope
    The Bank of England's promise to post collateral to its counterparties in over-the-counter derivatives transactions surprised many but also gave hope to swaps dealers. They say that now that a respected institution such as the Bank of England has committed to offsetting a cost that dealers usually eat, thereby lifting the stigma of posting such collateral, others will follow suit. International Financing Review (free content) (6/23) LinkedInFacebookTwitterEmail this Story
  • Other News
The FIA Japan Conference will focus on the vital developments currently taking place in the Japan financial markets. Hear exchange CEOs, regulators and global market users discuss regulatory reform, high-frequency trading, and more! Click here for more information.
  Commodities and Managed Futures 
  • NYSE Liffe to move forward with commodity-delivery limits
    NYSE Liffe says it will impose delivery limits on its London commodity contracts. The NYSE Euronext derivatives division said the limits won't hinder commercial activity and would have allowed most deliveries from the past decade. "The exchange believes that the proposal to limit the size of deliveries has general member and user support," NYSE Liffe said. "Delivery limits will normally be reviewed every six months." Bloomberg (6/25), Reuters (6/25) LinkedInFacebookTwitterEmail this Story
  • Commodity-market changes present some opportunities
    Challenges for the commodities markets have prompted banks to rein in or close their trading desks over the past six months. However, some opportunities are popping up amid regulatory changes, an increased focus on risk mitigation and a shift toward automated execution. Technology vendors and specialist risk-management firms are capitalizing on the changing landscape, Rebecca Hampson writes. Financial News Online (U.K.) (subscription required) (6/25) LinkedInFacebookTwitterEmail this Story
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  Featured Content 

  FIA News 
  • The Future of Clearing
    Nigel Wharton, global head of derivative clearing operations at Credit Suisse, will moderate a panel discussion with clearinghouse leaders from Europe and the U.S. at the FIA/FOA International Derivatives Expo in London on June 27. Topics include strategic initiatives, impact of new regulations, protection of customer funds, changes in market infrastructure and the impact of OTC clearing on the futures model. LinkedInFacebookTwitterEmail this Story
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The impulse to travel is one of the hopeful symptoms of life."
--Agnes Repplier,
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