Here’s another reminder, this time from New York Fed staffer Lorie Logan: While the Federal Reserve plans to cut the size of its balance sheet, it probably won’t end up shrinking that much. Even before the Fed addresses the tougher questions — how it wants to control interest rates, and who it wants to trade with —…
Securities Lending Times and Global Investor/ISF both reported that David Raccat, formerly of BNPP and J.P. Morgan, has launched a new securities finance disintermediation platform, Wematch.SecuritiesFinancing. Securities Lending Times reports Raccat as saying “The platform is driving the securities financing markets into the new world where best execution, liquidity, price discovery, and regulatory reporting will…
Regulatory reforms since the financial crisis have sought to make the financial system safer and severe financial crises less likely. But by limiting the ability of regulated institutions to increase their balance sheet size, reforms—such as the Dodd-Frank Act in the United States and the Basel Committee’s Basel III bank regulations internationally—might reduce the total…
FinTech platforms account for an increasing share of credit provision and policymakers have to consider the opportunities and risks such activity brings, a new report by the Committee on the Global Financial System (CGFS) and the Financial Stability Board (FSB) finds. The report analyses the nature of FinTech credit and finds wide variation in the business models…
Ledger Holdings, parent company of bitcoin options exchange LedgerX, closes $ 11.4 Million in Series B financing. Led by Miami International Holdings Inc. and Huiyin Blockchain Venture Investments, this funding supports LedgerX’s plan to operate a regulated exchange and clearing house for bitcoin and other digital currencies. “In the short term, these investments will further…
The European Securities and Markets Authority (ESMA) has issued today an opinion regarding the implementation of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). The opinion clarifies the concept of “traded on a trading venue” (TOTV), which is relevant for a number of provisions under MIFID II and MiFIR. The concept of TOTV is…
Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) today approved the creation of LabCFTC, a new initiative aimed at promoting responsible FinTech innovation to improve the quality, resiliency, and competitiveness of the markets the CFTC oversees. Located in New York LabCFTC will also look to accelerate CFTC engagement with FinTech and RegTech solutions that…
Santiago, Chile – 17 May 2017: IBM (NYSE: IBM) and Chile’s Santiago Exchange, the largest in the country, today announced a partnership to introduce blockchain technology across the country’s financial sector. The agreement makes the Santiago Exchange the first stock market in Latin America to apply IBM Blockchain technology within its short selling system for securities lending….
Bloomberg: Senate Majority Leader Mitch McConnell said he’s pessimistic Congress will overhaul the Dodd-Frank Act because he doubts Republicans can secure enough Democratic votes to make major changes to the sweeping legislation that tightened oversight of banks after the financial crisis. “I’d love to do something about Dodd-Frank, particularly with regard to community banks but that…
EU rules are to be introduced on money market funds, aimed at supporting the role that the €1 trillion market plays in financing the economy. On 16 May 2017, the Council adopted a regulation to ensure the smooth operation of the short-term financing market. This follows initiatives by the G20 and the Financial Stability Board. “These rules will go a long…
BGC Partners Inc (BGCP.O) plans to launch a new electronic trading platform for U.S. Treasuries by the end of June, four years after selling a similar business to exchange operator Nasdaq Inc (NDAQ.O), an executive at the brokerage said on Tuesday. The new platform has been three to four times faster in testing with professional…
Pan-European RFR indices launched in 2012 MTS and BrokerTec account for average daily repo volumes of €230 billion Accurately reflects cost of Repo funding for executed trades on MTS and BrokerTec MTS, a leading fixed income electronic trading venue that is part of London Stock Exchange Group and BrokerTec, a NEX Group business which provides…
DTCC to evaluate opportunities to strategically expand the use of the cloud more broadly across its external services and applications New York/London/Hong Kong/Singapore, May 15, 2017 – A new white paper from The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, suggests that cloud computing has reached…
Fund administrators, custodians, prime brokers, auditors, law firms and fund marketers all play a crucial role in allowing hedge fund managers to operate their businesses effectively. The service provider industry is continually changing as new players enter the market and existing firms consolidate and develop their range of offerings. Fund managers and service providers alike…
The 2007-09 financial crisis highlighted weaknesses in the over‑the‑counter (OTC) derivatives markets and the increased risk of contagion due to the interconnectedness of market participants in these markets. As a response, the global regulatory community introduced a number of reforms to both the market structure and the regulatory environment. The intent of these innovations was…
The future health of over-the-counter derivatives trading is increasingly dependent on the ailing repo market, buy- and sell-side participants have warned. The full article is available with subscription at http://www.risk.net/derivatives/5263741/swaps-markets-health-seen-as-resting-on-sickly-repo
To deal with the risks created by shadow banking activities or market-based finance new statistical definitions and adjusted reporting requirements are needed to include the quasi-money services provided by shadow banking in monetary statistics as well as to record changes in risk exposures generated by OTC derivatives in flow-of-funds statistics. Without this reporting, which should also…
This morning I’d like to talk about the changing nature of the global swaps market. It’s been almost a decade since the onset of the financial crisis. It will be seven years next month since passage of the main legislation – the Dodd Frank Act of 2010 – that laid the groundwork for the post-crisis…
During the 2007-08 financial crisis, the Fed established lending facilities designed to improve market functioning by providing liquidity to nondepository financial institutions—the first lending targeted to this group since the 1930s. What was the financial condition of the dealers that borrowed from these facilities? Were they healthy institutions behaving opportunistically or were they genuinely distressed?…
The Financial Stability Board (FSB) today published the Global Shadow Banking Monitoring Report 2016. The report presents the results of the FSB’s sixth annual monitoring exercise to assess global trends and risks in the shadow banking system, reflecting data up to the end of 2015. It covers 28 jurisdictions, including Belgium and the Cayman Islands for…
European banks are privately warning they will have to shift thousands of people out of Britain if Brexit negotiations push the Bank of England to demand that they reinforce London operations with fresh capital, executives have told Reuters. These capital demands, which could amount to an estimated 40 billion euros (33.8 billion pounds), threaten to…
Highlights from the BIS over-the-counter (OTC) derivatives statistics for the six months ending in December 2016: The increase in OTC derivatives positions that took place in the first half of 2016 reversed in the second. The notional amount of outstanding OTC derivatives declined from $553 trillion to $483 trillion between end-June and end-December 2016 (view data). Their gross market value –…
As U.S. registered fund companies anticipate compliance with new regulations governing portfolio reporting and liquidity risk management, Northern Trust today announced an agreement with Donnelley Financial Solutions that will provide fund administration clients with an automated process for the collection, creation, review and filing of disclosure documents. Under the agreement, Northern Trust will use Donnelley…
The U.S. has softened its position in talks on global bank-capital rules, easing a months-long deadlock with the European Union and boosting the chances of a deal. The Federal Reserve, which leads the U.S. delegation in the Basel Committee on Banking Supervision, is ready to compromise on the level of a disputed output floor, according…
SIX Repo Ltd’s repo trading platform CO:RE, owned by SIX Securities Services, has launched two additional European Equity Index Baskets: the CAC 40 and FTSE 100 for equity repo financing. This is in addition to the available baskets for the Swiss SMI 20, German DAX 30, MIB 40 and the Spanish IBEX 35 index. SIX…
Partnership Extends CCP Access for Securities Lending Market NEW YORK/CHICAGO (May 5, 2017)—OCC (Options Clearing Corporation), the world’s largest equity derivatives clearing organization, and EquiLend Clearing Services (ECS), the global securities finance trading platform and technology provider, have joined forces to bring greater access to central counterparty clearing in the securities finance marketplace. ECS has…
We would like to welcome you to our securities finance quarterly review. Our team has been hard at work over the last few months to ensure that this report provides you with a comprehensive overview of the key trends that drove our market during Q1. Our only regret is that the reported revenue trends failed…
Broader institutional marketplace to benefit from FICC repo clearing, reducing risk and increasing the potential for capital relief New York / London / Singapore / Hong Kong / Sydney – May 2, 2017 – The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that the…
U.S. Investment Grade and High Yield Volume Surpass $18.3 Billion in March NEW YORK, May 1, 2017 /PRNewswire/ — Tradeweb Markets, a leading global provider of fixed income, derivatives and ETF marketplaces, announced the launch of all-to-all trading on its U.S. institutional credit platform, following a successful beta period with over 140 active buy- and sell-side firms that…
The burden of new regulation for derivatives markets would be eased and competition increased under proposals from the European Union’s executive, a document seen by Reuters showed, which omitted any moves to curb euro clearing in Britain after Brexit. Under the plans, which bankers expect the European Commission to publish next Wednesday, pension funds would…
Overview This Prudential Regulation Authority (PRA) policy statement (PS) provides final policy as part of the PRA’s transposition of the Markets in Financial Instruments Directive II (MiFID II) following Consultation Paper (CP) 43/16 ‘Implementation of MiFID II: Part 2’. This is part of a legislative package, comprising the Directive, MiFID II (2014/65/EU); the Markets in…
Editor’s Note: the collateral squeeze comes to Japan courtesy of the Bank of Japan. TOKYO — Unable to find the government bonds they need on the market, Japanese financial institutions are relying on the costly measure of borrowing from the Bank of Japan for days on end, underscoring the strain caused by the bank’s grip…
A new, voluntary UK Money Markets Code setting out the standards and best practice expected from participants in the deposit, repo and securities lending markets has been published today (26 April). The Code is underpinned by the key principle that participants should always act in a manner to promote the integrity and effective functioning of…
Elkhorn has filed for an ETF that will rely on a securities-lending strategy. The Elkhorn Rich Hard To Borrow Securities ETF (HARD) is actively managed, and will follow a strategy in which it purchases securities that have been determined to be hard to borrow and then lends them out for premium income. The fund will…
The Basel Committee on Banking Supervision has today issued the Twelfth progress report on adoption of the Basel regulatory framework. This report sets out the adoption status of Basel III standards for each BCBS member jurisdiction as of end-March 2017. It updates the Committee’s previous progress reports which have been published on a semiannual basis since…
By John Fennell, OCC Executive Vice President and Chief Risk Officer April 25, 2017 As the agency for all U.S. options exchanges and in our role as a Systemically Important Financial Market Utility, OCC is a strong advocate for our exchanges, clearing firms and all market participants. Our clearing members commit capital and provide a…
The Global Crisis highlighted how linkages between banks and shadow banking entities can lead to the amplification of shocks across borders and sectors, prompting policymakers to seek to improve the monitoring framework for assessing the interconnectedness of the shadow banking system. This column documents the cross-sector and cross-border exposures of EU banks to globally domiciled…
New York and London, 25 April 2017 – ENSO, a NEX Group business and leading portfolio finance and centralized treasury management solution for the buy-side, announces today that it plans to expand the ENSO Broker Vote tool (“Broker Vote”) to include MiFID II research consumption, powered by RSRCHXchange, the MiFID II compliant marketplace for institutional research. The expanded tool will provide…
Presidential Memorandum for the Secretary of the Treasury MEMORANDUM FOR THE SECRETARY OF THE TREASURY SUBJECT: Financial Stability Oversight Council The Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203 (the “Dodd-Frank Act”), authorizes the Financial Stability Oversight Council (FSOC) to determine that a nonbank…
Presidential Memorandum for the Secretary of the Treasury MEMORANDUM FOR THE SECRETARY OF THE TREASURY SUBJECT: Orderly Liquidation Authority Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203 (the “Dodd-Frank Act”), established an Orderly Liquidation Authority (OLA). Using OLA, the Secretary of the Treasury (Secretary) may place a financial company in…
Results of the March 2017 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets Less favourable non-price terms for secured funding and for non-cleared OTC derivatives Worsened market liquidity for underlying collateral Less favourable credit terms than one year ago for most counterparty types Survey respondents reported that credit terms…
The European Securities and Markets Authority (ESMA) has published today its final technical advice to the European Commission regarding supervisory fees for Trade Repositories (TRs) under the Securities Financing Transactions Regulation (SFTR). ESMA, in order to ensure a level playing field across EMIR and SFTR, is also proposing some changes to the way ESMA’s fees for TRs are calculated…
London, April 20, 2017 – Bloomberg and Bats Europe have today announced they plan to provide Bloomberg customers with the ability to use their respective Approved Publication Arrangements (APA)1 to fulfil MiFID II transparency reporting requirements. Under MiFID II, market participants are facing a steep increase of reporting tasks they need to manage, for firm…
The Joint Committee of the European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) has published its spring 2017 Report on risks and vulnerabilities in the European Union’s financial system. The Report highlights the risks to the stability of the European financial sector in an environment subject to political and economic uncertainties. In particular, the protracted period…
The European Central Bank’s (ECB) decision to stick to its bond buying program despite strong EU-wide economic growth has damped hopes in the market that interest rates will rise any time soon. This loose monetary policy can be felt in the real economy and has effects that reach into the post-trade business as well. “Quantitative…
London (UK) – 19 April 2017 – Squawker®, the platform for sophisticated trading communities to execute hedging and capital optimisation transactions on-exchange, today announced the successful completion of the launch phase of its Equity Finance platform, with 6 out of the top 10 global investment banks live, and announced Ian Axe and Derek Bandeen as…
– British high court throws out bid to revalue collateral – Repo and securities lending positions were between Landsbanki Islands and Raiffeisen – Landsbanki Islands had defaulted on the trade The full story is available from Institutional Investor here: http://www.institutionalinvestor.com/article/3671091/banking-and-capital-markets-banking/collapsed-icelandic-bank-loses-legal-challenge-over-trades.html#.WPiNCTKZPuQ
Developing the ISDA SIMM was never going to be a one-time deal – for ISDA to roll it out for the September 2016 implementation, and then walk away. It was always recognized that regular updates and recalibrations would be necessary, in line with regulatory requirements. And an important set of updates was introduced this month….
