Posts by Josh Galper

Basel Committee, Benchmarks, FSB, LIBOR

Continued reliance of financial markets on LIBOR poses clear risks to global financial stability. Transition away from LIBOR by end-2021 requires significant commitment and sustained effort from both financial and…

ISLA writes ESMA and NCAs with technical concerns on SFTR Phase 1 data submission

July 10, 2020

ISLA, SFTR

A few days from now, many ISLA member firms will begin submitting SFT data to their preferred Trade Repositories, as directed under the Securities Financing Transactions Regulation (SFTR). The preparation…

ESMA issues statement of coordination on external support of money market funds

July 9, 2020

ESMA, MMFs, money market funds

MMFs may enter into transactions with third parties, including affiliated or related parties provided the requirements of Article 35 of the MMF Regulation are met. For that purpose, it is…

ESMA consults on guidelines on calculation of positions under SFTR

July 9, 2020

ESMA, SFTR

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has launched a consultation on draft Guidelines on the calculation of positions by Trade Repositories (TRs) under the…

European Investment Bank joins LCH SA as first supranational clearing member

July 9, 2020

European Investment Bank, LCH, RepoClear

European Investment Bank live accessing €GCPlus at LCH RepoClear First supranational institution to become a clearing member of LCH SA LCH, a leading global clearing house, today announced that the…

Risk: Mind the tax when hedging TRS

July 9, 2020

risk, Total Return Swaps

Total return swaps (TRS) rarely appear in the pages of Cutting Edge. This is partly because they do not require complex pricing models. However, their valuation is still affected by…

CrossBorder Capital: China’s support for US dollar can no longer be relied upon

July 8, 2020

China, CrossBorder Capital, dollar

When things cannot go on forever, they stop. And so it is with China’s support of the US dollar. Foreigners sold more than $500bn of US government bonds during the second quarter, and…

UK Competition and Markets Authority raises concerns on ION-Broadway deal

July 8, 2020

Broadway, Ion, UK Competition and Markets Authority

The CMA has decided, on the information currently available to it, that it is or may be the case that this merger has resulted or may be expected to result…

ISDA documents depth of customization for non-cleared swaps

July 8, 2020

ISDA, non-cleared swaps

ISDA: Interest Rate Swaps: Cleared and Customized As policymakers in emerging and frontier markets consider the regulatory framework for financial markets in their jurisdictions, the need for customized risk management…

OCC Implements Phase III of Financial Safeguards Framework

July 8, 2020

clearing fund, Cover Two, OCC, SIFMU

Enhancing its resiliency as a Systemically Important Financial Market Utility (SIFMU), OCC, the world’s largest equity derivatives clearing organization, today announced that the U.S. Securities and Exchange Commission (SEC) approved…

Arthur Cox: Is AIFMD II on the way?

July 8, 2020

The European Commission has published its report on the operation of the Alternative Investment Fund Managers Directive (EU/2011/61) (“AIFMD”) and is expected to issue a consultation on proposed amendments to…

TriOptima Extends Collaboration with DTCC to Meet Client Securities Financing Transactions Reconciliation Needs

July 8, 2020

DTCC, SFTR, TriOptima

TriOptima, a leading infrastructure service that helps to lower costs and to mitigate risk in OTC derivatives markets, has extended data connectivity between The Depository Trust & Clearing Corporation (DTCC)…

Phil Morgan named CEO of Pirum Systems

July 7, 2020

Pirum Systems, the leading provider of post-trade market infrastructure technology for the global securities finance industry, has promoted Phil Morgan to be chief executive effective 10 August. Phil joined Pirum…

Does the world need an ECB repo facility for central banks?

July 7, 2020

ECB, Europe, Repo

European Central Bank, Repo, topstory

The European Central Bank’s (ECB) recent decision to provide a Euro repo facility to non-Euro area central banks through June 2021 was an interesting one, suggesting that like the dollar,…

ISLA Publishes CSDR Mandatory Buy-in & Cash Penalties Regimes FAQs

July 6, 2020

CSDR, ISLA

ISLA is pleased to announce the publication of the CSDR Mandatory Buy-in & Cash Penalties Regimes FAQs. Produced in association with Clifford Chance, the FAQs explain the legislative background and…

Fed shift to afternoon repo operations helps pricing but not volumes (Premium)

July 6, 2020

Federal Reserve, Repo, US

Federal Reserve, Repo, topstory, US

The decision by the Federal Reserve effective June 22, 2020 to move repo operations to the afternoon is showing up in higher US Treasury repo rates. Both the data and…

Singapore’s Variable Capital Company plan is a tax play worth watching (Premium)

July 2, 2020

Asia, Regulatory

securities finance, Singapore, topstory, Variable Capital Company

Singapore launched a new fund structure in January 2020, the Variable Capital Company (VCC), that is picking up interest from the global hedge fund community. This is not just part…

SEC Charges BNP Paribas with Violations of Regulation Sho

June 30, 2020

BNPP, Reg SHO, sec

The Securities and Exchange Commission today announced settled charges against BNP Paribas Securities Corp. (f/k/a BNP Paribas Prime Brokerage Inc.), a New York-based broker-dealer, for loaning securities to a customer…

Reuters: Bank of Korea plans to provide dollars to financial firms via repo operations

June 30, 2020

Bank of Korea, Repo, South Korea

South Korea’s central bank said on Tuesday it plans to provide dollar funds to local financial firms via repurchase agreements to stabilise the foreign exchange market if volatility rises due…

Client Webinar July 15: Revenues and Expenses of US Mutual Funds and ETFs in Securities Lending

June 30, 2020

ETFs, Investments, Securities Lending

ETFs, mutual funds, Securities Lending, topstory, US

July 15, 2020 10AM New York 3PM London 4PM Paris/Frankfurt This Finadium client webinar will present our analysis of US mutual fund and ETF fund filings in securities lending for…

Fed blog: banks again taking advantage of Leverage Ratio arbitrage

June 30, 2020

Federal Reserve, Leverage Ratio, Liberty Street Economics

Leverage limits as a form of capital regulation have a well-known, potential bug: If banks can’t lever returns as desired, they can boost returns on equity by shifting toward riskier,…

ISDA derivatives survey: 96% reported declines in liquidity before central bank intervention

June 30, 2020

derivatives, Greenwich Associates, ISDA

ISDA has teamed up with Greenwich Associates to conduct a survey that explores the impact of the coronavirus pandemic on derivatives market liquidity. The survey investigates the causes of the…

WSJ: Money-Market Shifts Are Bad News for Profit-Starved Global Banks

June 30, 2020

fidelity, Money Markets, WSJ

Last week, Fidelity Investments said it would close two institutional prime money-market funds with a total of around $14 billion in net assets. That’s an ominous portent for some non-U.S.…

Looking for better market information? Finadium runs 3-6 months ahead of the news cycle

June 30, 2020

Central banks, Collateral Management, Prime Brokerage, Repo, Securities Lending

BNPP, Central Bank Digital Currencies, Central Banks, Deutsche Bank, Prime Brokerage, SA-CCR, Securities Lending, topstory

Finadium content often runs three to six months ahead of the popular news cycle. Here’s what we’ve published for clients lately and here’s what we’ve seen months later. Continue reading

“People are policy”: Quarles and Brainard at the Federal Reserve (Premium)

June 29, 2020

Federal Reserve, Regulatory

Federal Reserve, Regulation, topstory, US

COVID-19 has sped up the already moving trend of deregulation in US financial markets. The idea that “people are policy”, attributed by himself to Edwin Feulner of the conservative Heritage…

US regulators finalize amendments to margin rules for inter-affiliate swaps and LIBOR legacy swaps

June 25, 2020

collateral management, inter-affiliate swaps, LIBOR, Margin, Swaps, US

Five federal agencies have finalized changes to their swap margin rule to facilitate the implementation of prudent risk management strategies at banks and other entities with significant swap activities. Under…

US regulators modify Volcker Rule to allow some covered fund investments

June 25, 2020

covered funds, hedge funds, private equity, US regulators, Volcker Rule

Five federal regulatory agencies today finalized a rule modifying the Volcker rule’s prohibition on banking entities investing in or sponsoring hedge funds or private equity funds—known as covered funds. The…

CPMI and IOSCO issue paper on CCP default management auctions with three categories for follow up

June 25, 2020

auctions, CCPs, CPMI, defaults, IOSCO

CPMI and IOSCO are today publishing an updated document entitled “Central counterparty default management auctions – Issues for consideration”. The purpose of this document is to provide a more complete…

EU authorities reach political agreement on CCP recovery and resolution

June 25, 2020

CCPs, Europe

The EU is stepping up its rules to make clearing houses safer and address systemic risk that could arise from their potential failure. The Presidency of the Council and the…

New Eurosystem repo facility to provide euro liquidity to non-euro area central banks

June 25, 2020

ECB, Repo

Eurosystem repo facility for central banks (EUREP) introduced as precautionary backstop to address pandemic-related euro liquidity needs outside euro area EUREP to allow broad set of central banks to borrow…

Working through the practicalities of the UK decision to cancel CSDR’s settlement discipline regime (Premium)

June 25, 2020

Europe, Regulatory

CSDR, Europe, settlement discipline, topstory, UK

The UK took a major stand in its preparations for Brexit on Tuesday with the publication of a statement on financial regulations. Securities finance and repo market participants immediately saw…

DTCC’S SFTR Community Jumps to 250 as Firms Ready for Forthcoming Regulation

June 24, 2020

DTCC, SFTR

With the deadline for the European Securities Financing Transactions Regulation (SFTR) quickly approaching, The Depository Trust & Clearing Corporation (DTCC), the premier post-trade infrastructure for the global financial services industry,…

ECB postpones T2-T2S consolidation project

June 24, 2020

ECB, T2S

Following requests by the European financial community, the Market Infrastructure Board has reviewed the timeline of the T2-T2S consolidation project and has concluded that postponing its go-live by one year,…

SIX Launches a New Triparty Agent to Enhance Collateral and Liquidity Management

June 24, 2020

collateral, collateral management, SIX, tri-party

The new comprehensive solution Triparty Agent from the Swiss Stock Exchange incorporating the Collateral Cockpit™, streamlines front and back office processes to provide seamless and effective collateral management for its…

American Banker: Two US Senators ask regulators to undo change to Supplementary Leverage Ratio

June 23, 2020

Supplementary Leverage Ratio, US

Warren and Brown urge regulators to undo recent capital change Two Democratic senators are calling on regulators to reverse their recent decision to ease a key capital requirement for banks.…

We review the US regulatory capital rule on excluding US Treasuries and central bank deposits from the Supplementary Leverage Ratio (Premium)

June 23, 2020

central bank deposits, Supplementary Leverage Ratio, topstory, US Treasuries

Regulatory

US regulators have released a more detailed rule for exempting US Treasuries (UST) from the Supplementary Leverage Ratio (SLR), along with central bank deposits. Banks have begun to ask for…

Fed blog: Japan’s Experience with Yield Curve Control

June 22, 2020

Japan, Liberty Street Economics, yield curve control

In 2016, the Bank of Japan augmented its large-scale asset purchase program with a commitment to keeping the yield on ten-year government bonds at “around zero percent.” Though this policy…

New survey data: collateral convergence on OTC derivatives and securities finance desks (Premium)

June 22, 2020

collateral management, collateral optimization, OTC derivatives, securities finance, topstory

Collateral Management

The idea that OTC derivatives, repo and securities finance desk collateral could converge has been discussed for years. New data from a webinar we ran with FIS shows how far…

Central banks to reduce frequency of US dollar liquidity operations

June 19, 2020

Bank of England, Bank of Japan, European Central Bank, Federal Reserve, Swiss National Bank, US dollar liquidity

In view of the improvements in US dollar funding conditions and the low demand at recent 7-day maturity US dollar liquidity-providing operations, the Bank of England, the Bank of Japan,…

Fed SCOOS: dealers have tightened prices and nonprice terms for SFTs and OTC derivatives across all counterparties

June 18, 2020

Federal Reserve, OTC derivatives, SCOOS, SFTs

Responses to the core questions in the June survey offered a few insights into recent changes in the terms under which dealers facilitate their clients’ securities and derivatives transactions. With…

BIS: US dollar still dominates international funding markets, accounts for 61% of foreign exchange reserves

June 18, 2020

BIS, Committee on the Global Financial System, dollar funding

US dollar funding: an international perspective Committee on the Global Financial System The US dollar dominates international finance as a funding and investment currency. Although the United States accounts for…

Will Basel IV’s complexity mean the end of internal market models? (Premium)

June 18, 2020

Basel III, Regulatory

Basel III, Basel IV, FRTB, internal models, topstory

Basel IV and its national transpositions will bring a new level of complexity and force standardization on global banking rules for jurisdictions that adopt the package, including the Fundamental Review…

Negative US interest rates: FT says Bloomberg telling terminal users to consider Bachelier options model instead of Black-Scholes

June 16, 2020

Bachelier, Black-scholes, negative rates, options

From the FT: Bloomberg recommended that users switch to a new model “as a preventive measure” to ensure that pricing functions on interest rate options or similar derivatives continue to…

Finadium: The Impact of COVID-19 on Collateral Management

June 16, 2020

Collateral Management, Technology

collateral management, COVID-19, technology, topstory

This report is a survey of 43 senior collateral professionals at 21 firms including technology suppliers, custodians, operations outsourcers and central securities depositories. Our questions covered a cross-section of how…

In collateral management, no news is very good news

June 16, 2020

Collateral Management

collateral management, COVID-19, topstory

The collateral management industry deserves congratulations for making almost no noise over the last few months. Nothing grabs headlines like a disaster, but the mainstream press has been remarkably quiet…

Montréal Exchange Launches CORRA Futures

June 15, 2020

Canada, Montreal Exchange, Repo

Montréal Exchange (MX), Canada’s derivatives exchange, today announced the launch of CORRA Futures, a new three-month futures contract based on the Canadian Overnight Repo Rate Average (CORRA) benchmark. The launch…

Bank of Canada becomes administrator of Canadian Overnight Repo Rate Average (CORRA)

June 15, 2020

Bank of Canada, CORRA, Repo

The Bank of Canada is now the administrator of the Canadian Overnight Repo Rate Average (CORRA) and will post today the first rate calculated using an improved methodology. The Bank…

FT: CalPERS to adopt up to 20% leverage in new portfolio strategy

June 15, 2020

In a presentation to the Calpers board, Ben Meng, chief investment officer, said the giant fund would take on additional leverage via borrowings and financial instruments such as equity futures.…

Webinar replay: Preparing For a Very Different Tomorrow: COVID-19 and the Collateral Ecosystem (Premium)

June 15, 2020

Uncategorized

collateral management