ICE's CDS futures being developed for credit derivatives market | Asset managers worry about collateral requirements, poll finds | Kuroda suggests BoJ could buy derivatives
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March 11, 2013
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Europe and U.S. implement swaps-clearing requirement
Big users of swaps in the U.S. and Europe will have to start processing transactions through a clearinghouse, as part of regulations the Group of 20 nations agreed upon in 2010. Financial Times (tiered subscription model) (3/10)
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ICE's CDS futures being developed for credit derivatives market
IntercontinentalExchange says it will make available in May futures contracts for credit default swaps. The move might open up the market to retail investors and others and could bolster parts of the credit derivatives market. "We are creating a simple, efficient product that brings in a large number of participants," ICE's Tom Farley said. The Wall Street Journal (3/8)
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Industry News and Trends
Asset managers worry about collateral requirements, poll finds
An Ernst & Young survey found that 58% of asset managers are concerned that there is a lack of quality and available collateral, particularly when rules governing over-the-counter derivatives come into effect. Additionally, only 24% said they have faith in collateral-transformation services. "It appears as though some firms do not want the hassle of dealing with the regulatory labyrinth to come, particularly those asset managers that don't have technical resources or sophisticated systems to easily adapt to new rules," said Ernst & Young's Anthony Kirby. The Trade News (U.K.) (3/8)
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Kuroda suggests BoJ could buy derivatives
Buying derivatives is a strategy the Bank of Japan would "carefully consider," said Haruhiko Kuroda, nominee for governor of the central bank. During confirmation hearings, Kuroda emphasized that he wants to address further easing and that while derivatives purchases are possible, bond buying remains the most likely tool the BoJ would use. Bloomberg (3/11)
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ICE will establish ceiling on fees in commodity market
IntercontinentalExchange has pledged to keep fees steady over the next five years on a number of commodity-derivative contracts that compete with those run by its prospective merger partner, NYSE Euronext. The decision is intended to ease the concerns of some merchandisers and buyers that the combined exchange would abuse its control over the trading of such commodities as cocoa, coffee and sugar. The Wall Street Journal (3/8)
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Commentary: Swaps-data-reporting battle needs to be resolved
Ivy Schmerken examines the controversy over the Commodity Futures Trading Commission's decision to allow CME Group to report swaps to its own data repository. Schmerken writes that the issue needs to be resolved as rules governing derivatives trading come into effect. (3/8)
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Regulatory Roundup
CFTC's top lawyer plans to leave agency at end of month
The Commodity Futures Trading Commission's top lawyer, Dan Berkovitz, has announced that he will leave the agency at the end of March. Berkovitz, who has been general counsel at the CFTC since June 2009, is most noted for helping to shape the agency's derivatives rules prompted by the Dodd-Frank Act. Bloomberg (3/8), The New York Times (tiered subscription model)/DealBook blog (3/8)
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Commentary: SEC and CFTC should be self-funded
Recent federal budget cuts highlight the importance of regulatory agencies being self-funded, write former Commodity Futures Trading Commission Chairman Brooksley Born and former Securities and Exchange Commission Chairman William Donaldson. The SEC and CFTC should be funded by the industry they regulate and not by the congressional appropriations process, write Born and Donaldson, who are both members of the Systemic Risk Council. Politico (Washington, D.C.) (3/10)
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Let me listen to me and not to them.
Gertrude Stein,
American writer and feminist
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