ICE discusses NYSE deal with European national regulators | SWF assets will continue to increase, study finds | Australian regulator warns of added risk in exchange M&A
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13 March 2013
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News on the global financial markets

Morning Bell
Basel panel reportedly will address banks' leverage ratio
The Basel Committee on Banking Supervision is set to delve into the leverage ratio for banks amid concerns about lenders' calculations, sources say. Banks are concerned about the how the ratio is designed. "The Basel Committee really needs to look at how the rule is going to affect different business models," said Jouni Aaltonen, a director at AFME. Existing proposals would mean "client-facing commercial banks are hit harder by the rule than interbank broker-dealers". Bloomberg (12 Mar.), Reuters (12 Mar.), The Wall Street Journal/Dow Jones Newswires (12 Mar.)
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Industry News
ICE discusses NYSE deal with European national regulators
IntercontinentalExchange CEO Jeffrey Sprecher says the company is concentrating on European national regulators in discussions to acquire NYSE Euronext and has yet to apply for EU approval. Sprecher is confident about the talks and says they should be "coming quickly to a conclusion". He also calls for more consolidation among European exchanges. Bloomberg (12 Mar.), Financial Times (tiered subscription model) (13 Mar.), The Wall Street Journal (12 Mar.)
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SWF assets will continue to increase, study finds
TheCityUK has released a study showing that sovereign-wealth funds' assets likely will reach $5.6 trillion by year-end. "SWFs should see a continuation in the inflow of capital in the coming years as some Asian countries, particularly China, continue to build up foreign exchange reserves, and commodity demand increases with the recovery in the global economy and growth in demand from emerging markets," according to the study. Reuters (12 Mar.)
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Australian regulator warns of added risk in exchange M&A
Greg Medcraft, chairman of the Australian Securities and Investments Commission, says investors' risk might increase because mergers among exchange operators would mean fewer bodies handling trading and clearing of derivatives. "It's a logical conclusion that if everything's going through two clearinghouses, there's a concentration of risk," Medcraft said. Bloomberg (11 Mar.)
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Ireland plans return to full market funding
The Irish National Treasury Management Agency plans to issue the country's first benchmark 10-year bond since receiving aid from the EU and the International Monetary Fund in 2010. Demand for the bond is expected to be strong. "It will be significantly well oversubscribed," said Ryan McGrath of Dolmen Securities. "There is a lot of demand that had been waiting for the bond issuance for the last number of weeks." Reuters (12 Mar.), The Wall Street Journal/Dow Jones Newswires (12 Mar.)
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Regulatory Roundup
ECB's Coeure outlines necessities to build banking union
Benoit Coeure, a member of the European Central Bank Executive Board, said at a conference in Madrid that financial integration is important for the euro zone, as he discussed requirements for a banking union. "For there to be a complete banking union, there has to be a credible fiscal backstop," Coeure said. "Any call on this backstop should be compensated ex post by levies on the financial industry." The Wall Street Journal/Dow Jones Newswires (12 Mar.)
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Questions abound about Asian CCPs under EMIR
The European Commission said last month that under the European Market Infrastructure Regulation, third-country central counterparties that are recognised by national regulators can continue serving financial institutions in Europe through the end of a six-month transitional period, which ends in September. Then, the CCPs will need to apply for recognition from the European Securities and Markets Authority. Questions remain about which CCP services will be allowed to continue. (subscription required) (12 Mar.)
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Bundesbank bolsters reserves amid economic uncertainty
Germany's Bundesbank says it has increased reserves for covering possible losses, such as a default on a bond holding, to €14.4 billion. A year ago, the central bank had €7.7 billion. "The crisis is not yet over despite the interim calm on financial markets," President Jens Weidmann said. The New York Times (tiered subscription model) (12 Mar.)
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FSA expresses concerns about banks' wealth management
The UK Financial Services Authority is raising questions after reviewing sales practices at several banks' wealth-management units. "The preliminary results of our latest review into the wealth-management divisions of six retail banks are worrying," Managing Director Martin Wheatley said. Bloomberg (12 Mar.), Reuters (12 Mar.)
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CFTC provides operational guidance concerning maintenance of CICIs issued through assisted registration
The US Commodity Futures Trading Commission has released important guidance on the maintenance of CFTC Interim Compliant Identifiers issued through assisted registration, including that self-registration (primary party registration) includes assisted registration. In addition, the document reiterates that rules require an entity subject to CFTC jurisdiction to:
  1. Certify its CICI if the identifier was not obtained through self-registration.
  2. Maintain its CICI after the identifier is issued, including recertification at appropriate intervals.
Download the CICI Utility Guidance on Registration and Certification.
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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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Humour is an affirmation of dignity, a declaration of man's superiority to all that befalls him."
-- Romain Gary,
French diplomat, novelist, film director and aviatour
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