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January 21, 2013
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Daily coverage for the global derivatives industry

  Top Stories 
  • CFTC seeks feedback on swaps rules
    A Commodity Futures Trading Commission meeting Jan. 31 will seek input from the financial industry about concerns that clients will shift from swaps to futures because of rules on swaps-execution facilities. Details of those rules will determine how expensive swaps trading will become. Reuters (1/18)
  Industry News and Trends 
  • CFTC and SGX eliminate hurdles in use of iron-ore swaps
    Hedge funds and other financial firms have resumed use of iron-ore derivatives after the Commodity Futures Trading Commission and Singapore Exchange removed regulatory obstacles. "Several of the U.S.-based financial institutions feel the path has now been cleared to trade through SGX again," said Kerry Deal of Jefferies Hong Kong. (subscription required) (1/21) LinkedInFacebookTwitterEmail this Story
  • Markets are hurt by unclear rules, CME's Duffy says
    Terry Duffy, executive chairman of CME Group, said at an industry conference that a lack of clarity in rule making is driving market issues, including low volume. "The rules have yet to come out and be clear, so what happens is that keeps participants on the sidelines until they see what's going to happen," Duffy said. (1/18) LinkedInFacebookTwitterEmail this Story
  • Bank decides to keep dealing in food-related derivatives
    Foodwatch and Oxfam International say certain financial derivatives have driven up food prices worldwide, but Deutsche Bank co-CEO Juergen Fitschen says there is little evidence to support that. "At the same time, agricultural-futures markets bring numerous advantages to farmers and the food industry," he said. "Deutsche Bank has therefore decided in the interest of its clients that it will continue to offer financial instruments linked to agricultural products." Reuters (1/19) LinkedInFacebookTwitterEmail this Story
  Regulatory Roundup 
  • Bond dealers get chance to comment on policy changes
    The Treasury Department sent a questionnaire last week seeking opinion on "drivers of supply and demand in the Treasury bill and repo markets," as well as how regulation is affecting trading. Officials also aim to establish whether the interest-rate swaps market is seeing change because of reporting requirements. Bloomberg (1/18) LinkedInFacebookTwitterEmail this Story
  • U.S. regulators still have many rules to write
    The Commodity Futures Trading Commission is two-thirds done writing 60 rules as mandated by the Dodd-Frank Act. The Securities and Exchange Commission has written 33 of 95 rules. Analysts expect the most important outstanding rules to be finished this year, but the entire process likely will take until at least 2014 to complete. The Trade News (U.K.) (1/18) LinkedInFacebookTwitterEmail this Story
  • IEA warns of volatility linked to energy-trading rules
    The International Energy Agency is expressing concern about rules that place stricter margin requirements and position limits on the energy-swaps market. "Regulatory uncertainties and inconsistencies within and across jurisdictions might in fact lead to less transparent and more risky global financial markets," the IEA said in a monthly report. Bloomberg (1/18) LinkedInFacebookTwitterEmail this Story
  • Foreign banks express concerns about Nibor manipulation
    Foreign banks have been e-mailing Norway's financial regulator and central bank about possible manipulation of the Norwegian Interbank Offered Rate. "As a market participant and as one of the largest issuers of Norwegian denominated debt I am writing to complain about the Norwegian fixings," one banker wrote. "They seem to bear no resemblance to market realities and we suspect fixings that resemble market abuse." Bloomberg (1/18) LinkedInFacebookTwitterEmail this Story
  ISDA News and Events 
  • Climate shocks cause price shocks
    A Jan. 4 article in The Telegraph discusses how the managing director of Waitrose, a major U.K. supermarket chain, expects prices could spike 5% because of substandard crop yields and the attendant supply shortage. The article goes on to say that this kind of shock might be, as the saying goes, "the new normal." Quoting the U.K. government's chief scientist, John Beddington: "There is going to be another billion people on the planet in 13 years' time. ... That is going to increase demand for food." ISDA believes it's important to understand and know the facts about commodity-price changes and volatility. That's the reason we developed, a website and blog. LinkedInFacebookTwitterEmail this Story

It is so difficult not to become vain about one's own good luck."
--Simone de Beauvoir,
French writer and philosopher

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