July 30, 2021
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Top Stories
The Alternative Reference Rates Committee has officially recommended CME Group's SOFR Term Rate as a replacement for US dollar Libor. "Market participants now have all the tools they need as we enter the transition's homestretch." said ARRC chairman Tom Wipf.
Full Story: Reuters (7/29),  Bloomberg (7/29),  Financial Times (subscription required) (7/29),  Practice Insight (7/29) 
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Credit Suisse says it will pursue all avenues, including legal action, to recover the $5.5 billion of losses it suffered from the collapse of family office Archegos Capital Management. An independent report from law firm Paul Weiss commissioned by the bank said Archegos probably deceived the lender and "obfuscated the true extent of its positions" but that staff also disregarded the risks.
Full Story: Financial Times (subscription required) (7/29),  The Wall Street Journal (7/29),  Reuters (7/29),  Bloomberg (7/29) 
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Industry Developments
In his latest Viewpoint column, FIA President and CEO Walt Lukken discusses how the distinct areas of digital assets and climate change share one important feature - that derivatives markets can play a key role to address both issues. "Our markets are designed to help manage risk in various forms in our economy," writes Lukken, noting that recent discussions with key stakeholders in the U.S. proves that "climate change and crypto assets will drive the Washington agenda for years."
Full Story: MarketVoice (7/28) 
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Cryptoasset exchange Binance will cease offering its futures and derivatives products across Europe amid regulatory pressure, the company said in a statement. Users in Germany, Italy and the Netherlands will be unable to open new accounts to trade such assets with immediate effect, with existing users given 90 days to close out their positions from an unconfirmed date.
Full Story: CoinDesk (UK) (7/30),  Reuters (7/30),  The Block (7/30) 
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Euronext, the stock market operator that does business throughout Europe, has said it is examining the possibility of reducing its use of the London Stock Exchange clearinghouse in Paris. The company said it instead might switch to CC&G, a clearinghouse it acquired when it bought Borsa Italiana in April.
Full Story: Global Investor (subscription required) (7/29),  Reuters (7/29) 
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Intercontinental Exchange's open interest in UK Allowance Futures reached a record level of 13,447 contracts by the end of the July 28 UKA auction. Overall, the UK Emissions Trading Scheme auction attracted 13 successful bidders.
Full Story: Global Investor (subscription required) (7/29) 
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Incorporating Refinitiv into the London Stock Exchange is turning out to be a lot more challenging and expensive than the exchange initially thought. Since January when the $15 billion deal closed LSEG stock has lost 15% of its value.
Full Story: The Wall Street Journal (7/29) 
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Ongoing commoditization of voluntary carbon credits on exchanges is having a dampening effect on prices as the lack of specific information included in the contracts hinders buyer interest. "With standardized contracts you don't know what exactly you are getting, and that's why the price is discounted," one carbon trader said.
Full Story: S&P Global (7/29) 
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Regulation and Enforcement
Congressman Don Beyer, D-Va, has introduced the "Digital Asset Market Structure and Investor Protection Act" which proposes to compel the US Securities and Exchange Commission and the US Commodity Futures Trading Commission to jointly clarify the regulatory status of the digital asset market. The bill also empowers the Federal Reserve to issue a digital dollar and would require the Secretary of the Treasury to approve any fiat-backed stablecoin prior to issuance.
Full Story: CoinDesk (UK) (7/29),  The Block (7/29) 
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The House Financial Services Committee has advanced a bill sponsored by Rep. Brad Sherman, D-Calif., that would allow the Federal Reserve to ease the adoption of contracts to the Secured Overnight Financing Rate. The proposed Adjustable Interest Rate (LIBOR) Act of 2021 would set a legal process for automatically switching legacy financial contracts from Libor to SOFR.
Full Story: American Banker (7/29) 
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A bipartisan Senate proposal to mandate reporting of cryptoasset transactions above $10,000 to the IRS, which would result in taxes on some trades, has caused consternation among cryptocurrency exchanges, their investors and advisers. Critics say the proposal has been drafted too hastily, while advocates say it would simply level the playing field between traditional assets and digital assets.
Full Story: MarketWatch (tiered subscription model) (7/29),  Bloomberg (7/29) 
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Cryptocurrency traders based in the US are finding ways to work around bans on offshore exchanges, according to a report from Inca Digital. The Commodity Futures Trading Commission said in a statement that American customers "will likely have little or no protection if they trade with unregistered firms that operate outside the US."
Full Story: The Wall Street Journal (7/30) 
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