News and Notes

Japan, JBOND, NEX

London, New York – 17 July 2018 – NEX Data, which delivers independent market intelligence and price information for OTC Data, and JBOND, the electronic platform for trading in Japanese…

Euroclear: Adapting to the New Equity-Friendly Collateral Landscape

July 18, 2018

equity collateral, Euroclear

The evolution of equity collateral is far from complete. Indeed, the whole collateral landscape is in flux, creating opportunities and challenges for multiple different types of user and supplier. In…

Risk: EU Considering Moving Leverage Ratio Reporting From Quarterly to Daily

July 18, 2018

The European Parliament wants to close a loophole in leverage-ratio reporting by making banks calculate the ratio daily, instead of quarterly. The switch is intended to reduce volatility by curbing…

Reuters: Lloyds Picks Frankfurt Post-Brexit

July 18, 2018

Lloyds (LLOY.L), Britain’s biggest mortgage lender, was widely expected to manage its continental business from one new subsidiary in Berlin. But executives now plan two further hubs to service customers…

SZSE Launches Bond Pledge-style Tri-party Repo Business

July 18, 2018

CSDC, SZSE, tri-party repo business

On July 13, 2018, Shenzhen Stock Exchange (hereinafter as “SZSE”) and China Securities Depository and Clearing (hereinafter as “CSDC”) officially released the Provisional Measures on Bond Pledge-style Tri-party Repo Transactions…

DTCC to open new office in Dublin

July 18, 2018

Brexit, DTCC, post market infrastructure

Global financial services firm will extend presence in Europe by adding new location in Ireland ahead of the UK’s planned withdrawal from the EU Ministries for Business, Enterprise and Innovation…

Working Group on Risk-Free Reference Rates Have Launched Consultation on Term SONIA Reference Rates

July 17, 2018

Sterling Risk-Free Reference Rates, TSRR

It seeks feedback on specific recommendations and encourages market participants to take forward work on the development of robust TSRRs, which members anticipate could be available in the second half…

FT: Market reverberates with accusations of ‘empty voting’

July 17, 2018

Empty vessels make the most sound, according to the proverb. So too does empty voting. Last week, accusations of empty voting — where investors borrow voting shares for short periods…

Tradeweb Repo Roars Back to Pre-Reform Levels: Repo volume up 30% vs. June 2017

July 17, 2018

Average Daily Volume exceeded USD590bn for the month, a 45% increase from June 2017. Average Daily Volume for 2Q18 was USD540bn vs USD380bn for 2Q17. Following were some notable trends…

ARRC Releases Title VII Letter

July 16, 2018

ARRC, Derivatives contracts, Dodd-Frank Act

The Alternative Reference Rates Committee (ARRC) released a letter requesting inter-agency guidance regarding the treatment of derivatives contracts referencing alternative risk-free rate benchmarks and associated transitions from interbank offered rates under Title…

Northern Trust Develops Enhanced Collateral Optimization Solution

July 13, 2018

collateral, Northern Trust

Northern Trust (Nasdaq: NTRS) has developed an enhanced collateral optimization solution designed to help institutional investors manage their collateral more efficiently whilst meeting the demands of continuing global regulatory reform.…

TMPG Releases Consultative White Paper on Clearing and Settlement in the Secondary Market for U.S. Treasury Securities

July 13, 2018

The Treasury Market Practices Group (TMPG) today released a consultative White Paper on Clearing and Settlement in the Secondary Market for U.S. Treasury Securities. The White Paper describes the various…

Acadia Soft announces Agreement Manager

July 13, 2018

AcadiaSoft, CSA, IM, VM

Norwell, MA, July 11, 2018 — AcadiaSoft, Inc., the leading industry provider of margin automation solutions for counterparties engaged in collateral management worldwide, today announced a new initiative, Agreement Manager,…

Brexit white paper asks EU for coordinated approach to financial services

July 12, 2018

Brexit, EU, UK

As the UK leaves the EU and the Single Market, it recognises the need for a new and fair balance of rights and responsibilities. The UK can no longer operate under…

ISDA Publishes Consultation on Technical Issues Related to Benchmark Fallbacks

July 12, 2018

Benchmarks, FSB, LIBOR

NEW YORK, July 12, 2018 – The International Swaps and Derivatives Association, Inc. (ISDA) has launched a market-wide consultation on technical issues related to new benchmark fallbacks for derivatives contracts…

FSB says that if IBORs don’t work, get ready to transition to new reference rates

July 12, 2018

FSB, LIBOR

The Financial Stability Board (FSB) has today published a statement on reforms to interbank offered rates (IBORs) and the development of overnight risk-free, or nearly risk-free, rates (RFRs) and term…

US OFR requests comments on proposed cleared repo data collection rule

July 10, 2018

LIBOR, OFR, Repo, SOFR

The Treasury Department’s Office of Financial Research is requesting comment on a proposed rule to establish a data collection covering centrally cleared funding transactions in the U.S. repurchase agreement (repo)…

WSJ: Emerging Markets Fight Back to Bolster Currencies

July 9, 2018

Some emerging-market central banks started dipping into roughly $6 trillion reserve stash in June reversal. Emerging-market central banks are tapping a roughly $6 trillion stash of foreign-exchange reserves as they…

ARRC releases principles for fallback contract language to move from LIBOR to SOFR

July 9, 2018

ARRC, LIBOR, SOFR

The Alternative Reference Rates Committee (ARRC) has released guiding principles for the development of fallback language for new financial contracts for cash products to ensure they will continue to be…

Dubai Financial Market settles inaugural repo transactions

July 9, 2018

DFM, Dubai, Repo

Dubai, 8 July 2018; Dubai Financial Market (DFM) today announced it has recently settled its inaugural repurchase (repo) transactions totaling 6 million Gulf Navigation shares and 45 million Drake &…

US regulators issue statement on the Economic Growth, Regulatory Relief, and Consumer Protection Act

July 6, 2018

EGRRCPA, FDIC, OCC

On May 24, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) amended provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) as well…

Global systemically important banks: revised assessment methodology and the higher loss absorbency requirement

July 6, 2018

Basel Committee, Basel III, GSIB

The Basel Committee on Banking Supervision published today the Global systemically important banks: revised assessment methodology and the higher loss absorbency requirement. The revised methodology is expected to be implemented in…

SIX building crypto trading, custody and settlement for mid-2019

July 6, 2018

News and Notes, News and Notes – Fintech

cryptocurrencies, SIX

Switzerland’s stock exchange – owned and managed by SIX – announced that it is building a fully integrated trading, settlement and custody infrastructure for digital assets. SIX is regulated as…

New State Street Research Reveals Cross-Border Distribution is Key to Accessing Investors Globally

July 5, 2018

asset managers, State Street

Nearly Two-Thirds of Asset Managers Plan to Launch Cross-Border Products LONDON, 4 July, 2018 — State Street Corporation (NYSE: STT) today announced the publication of its latest research, the State…

Prolonged low interest rates could affect financial stability, central banks find

July 5, 2018

BIS, Committee on the Global Financial System, financial stability

Low market interest rates for a long time could have implications for financial stability as well as for the health of individual financial institutions, a report by the Committee on…

Bank of England discussion paper: Building the UK financial sector’s operational resilience

July 5, 2018

Bank of England, Market infrastructure, operational resilience

The Bank of England, Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have published a joint discussion paper (DP) on an approach to improve the operational resilience of firms…

Societe Generale to acquire Commerzbank Equity Markets and Commodities activities

July 5, 2018

Commerzbank, Societe Generale

Societe Generale is announcing that it has reached an agreement to acquire Commerzbank’s Equity Markets and Commodities business (EMC), a leading European manufacturer, distributor and market maker of structured and…

Coinbase’s crypto custody “open for business”

July 3, 2018

News and Notes, News and Notes – Fintech

Coinbase, crypto custody

Coinbase announced the official launch of its crypto custody service. The platform expects to be on-boarding crypto hedge funds, exchanges and ICO teams in the coming weeks. The custody service…

OneChicago’s annus horribilis continues: drops 77% yoy, but up 7+% mom

July 3, 2018

OneChicago, securities finance

OneChicago, a securities finance exchange, today announced its June 2018 volume of 596,352, a decrease of 77% year-over-year. But that’s up over 7% month-on-month: May 2018 volumes were at 554,378 (a…

OCC seclending activity up 17% in June yoy

July 3, 2018

News and Notes, Uncategorized

OCC, Securities Lending CCPs

OCC’s securities lending CCP activity was up 17% in new loans from June 2017 with 238,378 transactions last month. Year-to-date stock loan activity increased 22 percent from 2017 with 1,392,596…

Eurex Clearing hits 8% of €-IRD global market share in June, partnership program gains traction

July 3, 2018

Eurex Clearing, OTC derivatives clearing

Eurex Clearing continues to receive broad market support for its Partnership Program. So far, 29 market participants from the US, the UK, Asia and Continental Europe have joined the program…

NEX European volume up 22% in June yoy, US repo up 2%

July 3, 2018

European Repo, NEX Markets. US Repo

NEX Markets reported a 15% increase in European repo volumes to €260.4 billion in May year-on-year and a slight increase of 2% increase month-on-month. US repo was up 6% to $229.2…

DTCC expanding GTR in Singapore in advance of regulations

July 2, 2018

DTCC, MAS, Singapore

The Depository Trust & Clearing Corporation (DTCC) announced that it will be enhancing its Global Trade Repository service (GTR) in support of the next phase of the Monetary Authority of…

Basel Committee amends NSFR standard for 6mo+ central bank claims

July 2, 2018

Basel Committee on Banking Supervision, NSFR

The Basel Committee on Banking Supervision has approved a technical amendment related to the treatment of extraordinary monetary policy operations in the Net Stable Funding Ratio (NFSR). Effective immediately, this amendment to…

Bloomberg: Guggenheim spinning off repo business

July 2, 2018

GLM Securities, Guggenheim Partners

Guggenheim Partners is planning to spin off a business specializing in repurchase agreements that it started about two years ago, according to people familiar with the plan. The business that started…

SEC opts for narrative over quantitative fund liquidity disclosures

June 29, 2018

The Securities and Exchange Commission adopted amendments to public liquidity-related disclosure requirements for certain open-end funds. Under the amendments, funds would discuss in their annual or semi-annual shareholder report the…

All banks pass Fed CCAR tests except Deutsche Bank

June 28, 2018

Federal Reserve releases results of Comprehensive Capital Analysis and Review (CCAR) As part of its annual examination of the capital planning practices of the nation’s largest banks, the Federal Reserve…

BNP Paribas Securities Services wins €240bn mandate from DWS

June 28, 2018

BNP Paribas, DWS, Fund Administration

BNP Paribas Securities Services and DWS, one of the world’s leading asset managers, have entered into an agreement for BNPP to provide DWS with fund administration services, and its retail…

ECB calculates ESTER, will release historical time series data (pre-ESTER)

June 28, 2018

ECB, ESTER

The European Central Bank (ECB) has decided on the final methodology for calculating the euro short-term rate (ESTER) – an overnight unsecured rate based entirely on money market statistical reporting…

UK FinMin unveils Brexit transition plans for financial services

June 28, 2018

Bank of England, Brexit, HM Treasury

The UK’s Treasury (HMT) set out its approach to onshoring financial services legislation under the European Union (Withdrawal) Act (EUWA). This is intended to ensure that there is a complete…

NY Fed report finds large post crisis regulation impacts on bank intermediated arbitrage

June 27, 2018

arbitrage, Federal Reserve Bank of New York

Researchers from the NY Fed argued in a staff report that post-crisis bank regulation can explain large, persistent deviations from parity on basis trades requiring leverage. Documenting the financing cost…

NY Fed report shows “living will” regulation raises banks’ cost of capital 10% per year

June 27, 2018

cost of capital, Federal Reserve Bank of New York, TBTF

In a staff report, NY Fed researchers present findings that “living will” regulation increases a bank’s annual cost of capital by 22 basis points, or 10% of total funding costs…

BoE reports on systemic risks: domestic and global, bank stress tests, cyber and LIBOR

June 27, 2018

Bank of England, Financial Stability Report, UK Financial Policy Committee

The Bank of England released the Financial Stability Report, which sets out the Financial Policy Committee’s view on the stability of the UK financial system and what it is doing…

LSEG takes stake in AcadiaSoft, LCH SwapAgent agrees margin automation development

June 27, 2018

AcadiaSoft, LCH SwapAgent, LSEG, non-cleared derivatives margin

AcadiaSoft announced that London Stock Exchange Group (LSEG) has taken a minority stake in the company. Along with this investment, AcadiaSoft has signed a preliminary agreement that will enable further…

ICMA advises on CSDR’s mandatory buy-in provision

June 26, 2018

CSDR, ICMA

The International Capital Market Association (ICMA) published a report on the potential market consequences of one of the provisions of the Central Securities Depository Regulation (CSDR), entitled: ‘How to survive…

Amundi tells ESMA that hedging transparency should be a condition for EMIR clearing exemption

June 26, 2018

Amundi, EMIR, ESMA, Securitization

The European Securities and Markets Authority (ESMA) has published the responses received to its consultation on amendments to the EMIR Clearing Obligation under the Securitization Regulation. Concerning STS (simple, transparent and standardized)…

FSB says “surprises” could spur tightening of financial conditions

June 26, 2018

FSB, G20, systemic risk

In an FSB plenary discussion on risks and vulnerabilities to the global financial system, a major concern identified a broad-based snap-back in long-term interest rates as a risk. After a…

BIS warns on bank window-dressing of repo at reporting periods

June 26, 2018

News and Notes, News and Notes – Fintech

Bank for International Settlements, Basel III, window-dressing

The Basel III leverage ratio is reported based on quarter-end figures in some jurisdictions, but is calculated based on daily averages during the quarter in others. It’s an example of…

Industry associations publish report on benchmark reform concerns and recommendations

June 25, 2018

AFME, alternatives to LIBOR, ICMA, ISDA, SIFMA