EXCHANGE NEWSWIRE, 13 September 2010
The European Commission will release this Wednesday new proposals aimed at regulating the OTC derivatives market, and aligning policies with those of the US. However, unlike the Dodd-Frank Act, the EC proposal will include rules deciding which contracts go through clearing houses, but will exclude the supervision of trading of OTC derivatives, which will be under a separate MiFID review.
The SEC extended circuit breakers to a significantly larger group of stocks, hundreds of ETFs and the Russell 1000 index, in response to a request from the exchanges and FINRA.
CFTC announced it will temporarily exempt commercial markets and boards of trade from the rule requiring them to become either swap execution facilities or designated contract markets, to give them time to adapt to new rules. “The Commission determined that it is appropriate to provide grandfather relief to certain ECMs and EBOTs to temporarily continue their ECM and EBOT operations after July 15, 2011," the CFTC said in a statement.
CME may expand into clearing of listed derivatives, as well as the clearing of European and Asian transactions, as early as November 2010.
ICE Link launched a service that facilitates legal confirmation of trades by counterparties trading CDS, a step towards the simplification and automation of processes in OTC derivatives markets.
BATS Europe announced that Depository Receipts (DR) from 12 countries, including South Korea, India and Russia, will be available for trading starting 24 September 2010 once the regulators give their approval. The DR trades will be cleared at the EMCF and netted for settlement at Euroclear Bank.
TOCOM will acquire the shares of the Japan Commodity Clearing House (JCCH) owned by Tokyo Grain Exchange (TGE) and raise its stake to 63.3%.
Fidessa launched global coverage of its fragmentation analysis tools, the FFI and Fragulator. “For the first time ever the trading community will be able to see how liquidity of stocks and shares is fragmented across domestic or international venues,” according to Katy Galasinski, Fidessa’s PR manager.
Basel Committee on Banking Supervision increased the minimum common equity requirement from 2% to 4.5% plus a capital conservation buffer of 2.5% to withstand future periods of stress bringing the total common equity requirements to 7%.
CFTC will not issue grandfather relief to parties that petition the Commission to continue to operate in reliance upon the Commodity Exchange Act’s (CEA) exempt commodity exemption for bilateral swaps after the deletion of that provision from the CEA by the Dodd-Frank Reform.
The European Central Bank released draft fee figures for users of the upcoming Target 2 Securities (T2S) cross-border settlement system, and said the fees are set at a level covering costs of the system’s development and operations, with no profit in mind.
Provided By: Equity Research Desk, www.erdesk.com