News and Notes

Bowmark Capital, Pirum

Bowmark Capital is backing the buy-out of Pirum Systems, a provider of post-trade market infrastructure technology for the global securities finance industry, from Five Arrows Principal Investments. The transaction, which…

BIS: Proportionality in bank regulation and supervision – a survey on current practices

March 19, 2019

The Basel Committee on Banking Supervision is today publishing the results of a survey it conducted on proportionality practices in bank regulation and supervision. The report summarises the responses received…

ISLA releases GMSLA pledge documentation

March 19, 2019

ISLA, pledge

As part of its commitment to support the use of global master agreements, ISLA in conjunction with Clifford Chance and key industry stakeholders has developed a pledge collateral version of…

ESRB: The effect of possible EU diversification requirements on the risk of banks’ sovereign bond portfolios

March 19, 2019

European Systemic Risk Board, sovereign bonds

European Systemic Risk Board Working Paper Series No 89 / March 2019 Recent policy discussion includes the introduction of diversification requirements for sovereign bond portfolios of European banks. In this…

Industry associations ask for revisions to US SA-CCR plans

March 18, 2019

SA-CCR, US

ISDA, SIFMA, ABA, BPI and FIA Comment on Proposed Standardized Approach for Calculating Exposure Amount of Derivatives Contracts Washington, DC, March 18, 2019 – The International Swaps and Derivatives Association,…

Bloomberg: Deutsche Bank prime brokerage revenue reportedly falls for third year

March 18, 2019

Bloomberg, Deutsche Bank, Prime Brokerage

Deutsche Bank’s Prized Hedge Fund Unit in Downward Spiral By Sonali Basak and Nishant Kumar March 14, 2019 A once-lucrative business within Deutsche Bank AG catering to hedge funds is…

ICMA supports daily leverage ratio calculations but asks for targeted refinements to support repo

March 18, 2019

Basel III, ICMA, Leverage Ratio, Repo

ICMA ERCC responds to BCBS consultation on leverage ratio disclosure March 13 2019 The ICMA ERCC has today responded to a consultative document published by the Basel Committee on Banking…

FSB asks ISDA to help clarify what happens if LIBOR is discontinued

March 15, 2019

Financial Stability Board, FSB, ISDA, LIBOR

FSB letter to ISDA about derivative contract robustness to risks of interest rate benchmark discontinuation This letter from the Co-chairs of the FSB’s Official Sector Steering Group (OSSG) encourages the…

IOSCO says jurisdictions making progress on standards for payment, clearing and settlement

March 14, 2019

IOSCO, PFMI

According to a recent update to the Level 1 information made available by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO), jurisdictions…

REGIS-TR Launches New UK Trade Repository

March 13, 2019

European Trade Repository REGIS-TR has announced the incorporation in London of its new UK trade repository (TR), REGIS-TR UK Ltd. The new TR has its operational infrastructure firmly in place…

St. Louis Fed: Why the Fed Should Create a Standing Repo Facility

March 13, 2019

FOMC, Repo, St. Louis Fed

By David Andolfatto, Senior Vice President and Economist, Federal Reserve Bank of St. Louis; and Jane Ihrig, Associate Director and Economist, Federal Reserve Board of Governors The Federal Open Market…

Paper: who pays and who gains from CCP services?

March 13, 2019

Who pays? Who gains? Central counterparty resource provision in the post-Pittsburgh world Fernando Cerezetti(1), Jorge Cruz Lopez(2), Mark Manning(3) and David Murphy(4) At the Pittsburgh Summit in 2009, G20 leaders…

FT: BoE tightens bank liquidity buffers before Brexit

March 12, 2019

Bank of England, Brexit, FT, liquidity buffers

The Bank of England has told some UK lenders to triple their holdings of easy-to-sell assets in the run-up to Brexit to cope with the market meltdown forecast if the…

Fed’s Powell on balance sheet normalization and the effective lower bound

March 9, 2019

Balance sheet, effective lower bound, Federal Reserve, Jerome Powell

Monetary Policy: Normalization and the Road Ahead Chair Jerome H. Powell At the 2019 SIEPR Economic Summit, Stanford Institute of Economic Policy Research, Stanford, California March 08, 2019 The Committee…

ESMA report values EU Alternative Investment Funds at €4.9 trillion, hedge funds at €264 billion

March 8, 2019

AIFs, ESMA

The European Securities and Markets Authority (ESMA) today published its first statistical report on European Union (EU) Alternative Investment Funds (AIF). The study finds that the EU AIF sector in…

SETL reorganizes, looks to sell ID2S

March 8, 2019

SETL announces start of corporate reorganisation further to successful completion and approval of the regulated CSD development Roadmap to position business for strong financial future. London 07 March 2019, In…

Get the weekly SFM update – our March 8 newsletter is online

March 8, 2019

Headlines: How custodians are evolving client-facing tech: BNY Mellon (Premium); One year later, Direct Repo® is thriving; An argument that more PB internalization will lead to more direct securities lending…

Tradeweb bilateral repo volumes surge in February 2019

March 7, 2019

Repo Volume Surges on Bilateral Trading Growth: ADV of $167.8 billion in repurchase agreements (Repo) trading volume was driven by growth in bilateral electronic trading on the Tradeweb platform.

Commerzbank and Deutsche Börse execute legally binding repo transaction on the blockchain

March 7, 2019

blockchain, Deutsche Borse, Repo

Commerzbank and Deutsche Börse have for the first time successfully used distributed ledger technology to execute a legally binding settlement of a repo transaction. The prototype transaction based on delivery…

The Hill: Dems offer legislation to tax financial transactions

March 7, 2019

Financial Transactions Tax, US

Democrats on Tuesday introduced legislation in the House and Senate to tax financial transactions, as lawmakers in the party examine various ways to raise more revenue. Legislation was introduced in…

Federal Reserve Board announces it will limit the use of the “qualitative objection” in its Comprehensive Capital Analysis and Review (CCAR) exercise, effective for the 2019 cycle

March 7, 2019

CCAR, Federal Reserve, stress tests

The Federal Reserve Board on Wednesday announced that it will limit the use of the “qualitative objection” in its Comprehensive Capital Analysis and Review (CCAR) exercise, effective for the 2019…

ISLA Publishes 10th Edition of the Securities Lending Market Report

March 6, 2019

ISLA, Market Report, Securities Lending

We are delighted to announce the release of the 10th Edition of the ISLA Securities Lending Market Report. The report continues to delve into how securities lending markets are behaving…

NRI’s I-STAR/CORE Updated for FSB’s Standards and Processes for Global Securities Financing Data Collection and Aggregation

March 6, 2019

Data, NRI, securities finance

Nomura Research Institute, Ltd. (NRI) (TOKYO: 4307), a leading provider of consulting services and system solutions, announced today the company’s I-STAR/CORE has been updated for international Financial Stability Board (FSB)’s…

ICE Benchmark Administration publishes survey results on use of LIBOR

March 5, 2019

IBA, ICE Benchmark Administration, LIBOR

The survey results are available at https://www.theice.com/publicdocs/Results_of_the_IBA_Survey_on_the_use_of_LIBOR.pdf IBA launched the survey on the use of LIBOR on December 4, 2018 in order to identify the LIBOR settings that are most…

Paper: Counterparty Risk and the Establishment of the New York Stock Exchange Clearinghouse

March 2, 2019

CCPs, counterparty risk, NYSE

Asaf Bernstein University of Colorado at Boulder Eric Hughson Claremont McKenna College Marc Weidenmier Chapman University and National Bureau of Economic Research We examine the effect of the establishment of…

IHS Markit Adds New Features to Securities Finance Platform

March 2, 2019

IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, announced the addition of new functionality to its Securities Finance platform, a leading source of data and…

ECB’s Cœuré makes the case for CCP oversight

March 1, 2019

CCPs, ECB

Introductory remarks by Benoît Cœuré, Member of the Executive Board of the ECB, at a conference on CCP risk management organised by the Deutsche Bundesbank, the ECB and the Federal…

OCC seclending CCP volume down 5.5% in Feb 2019 year over year

March 1, 2019

CCP, OCC, Securities Lending

OCC’s securities lending CCP activity was down 5.5 percent in new loans from February 2018 with 105,993 transactions last month. Year-to-date stock loan activity decreased 3.5 percent from 2018 with…

ARRC Launches Enhanced Website

March 1, 2019

ARRC, SOFR

Revises Website in the Interest of Providing Comprehensive Information About, and Facilitating the Public’s Understanding of the ARRC and its Work The Alternative Reference Rates Committee (ARRC) launched an enhanced…

Bank of England working paper: Impact of QE on corporate bond liquidity

March 1, 2019

Bank of England, Corporate Bonds, Liquidity, Quantitative Easing

Staff Working Paper No. 782 By Lena Boneva, David Elliott, Iryna Kaminska, Oliver Linton, Nick McLaren and Ben Morley In August 2016, the Bank of England (BoE) announced a Corporate…

Basel Committee discusses policy and supervisory initiatives and approves implementation reports

March 1, 2019

Basel Committee, Benchmarks, Initial Margin

The Basel Committee on Banking Supervision met in Basel on 27-28 February to discuss a range of policy and supervisory issues, and to take stock of its members’ implementation of…

Get the weekly SFM update – our March 1 newsletter is online

March 1, 2019

Headlines: We propose a template for US pension plan securities lending reporting; Finadium: US Pension Plans in Securities Lending; How to grow in the prime brokerage market for 2019 (Premium);…

Fed staff report: Complexity in Large U.S. Banks

February 28, 2019

Federal Reserve, US banks

While both size and complexity are important for the largest U.S. bank holding companies (BHCs), specific types of complexity and their patterns across banks are not well understood. We introduce…

Reuters: EU gives market benchmark compilers two-year grace period

February 27, 2019

Benchmarks, EU, Reuters

LONDON (Reuters) – The European Union has agreed to give the financial sector an extra two years to comply with new rules aimed at avoiding a repeat of attempts to…

ISLA publishes CSDR: Settlement Discipline Impact to Securities Lending

February 26, 2019

CSDR, ISLA, Securities Lending

ISLA is delighted to publish CSDR:Settlement Discipline Impact to Securities Lending, which investigates CSD Regulation (EU)No 909/2014 and its impact on settlement disciplines from the perspective of Securities Lending activity. The…

EBA publishes revised Guidelines on outsourcing arrangements

February 26, 2019

The European Banking Authority (EBA) published today its revised Guidelines on outsourcing arrangements setting out specific provisions for the governance frameworks of all financial institutions within the scope of the…

Former head of OFR argues for greater data standardization

February 22, 2019

Big Data, OFR, standardization

The Data Standardization Challenge Richard Berner Leonard N. Stern School of Business, NYU Kathryn Judge Columbia Law School January 27, 2019 Data standardization offers significant benefits for industry and regulators…

Reuters: LCH says bulk of euro repo, debt now cleared in Paris unit

February 22, 2019

LCH, Repo

LONDON (Reuters) – Nearly all UK-based clearing of euro-denominated repo and government bond trades moved to Paris this week, the London Stock Exchange’s clearing arm said on Thursday in a…

Get the weekly SFM update – our February 22 newsletter is online

February 22, 2019

Headlines: Federal Reserve paper shows securities lending benefits to OTC market liquidity; For US banks, is CCAR or the Leverage Ratio the binding constraint on securities finance; ECB papers highlight…

Securitize and OTCXN team up for non-custodial end-to-end DSO service

February 20, 2019

Anna Reitman

blockchain, digital security offering, OTCXN, Securitize

Securitize has announced a new strategic relationship with OTCXN, a live blockchain-powered capital markets infrastructure company for institutional traders to trade digital assets and FX while eliminating the settlement risk…

BIS Working Paper: Safe assets: made, not just born

February 20, 2019

BIS, HQLA, safe assets

Official reserve managers have a big stake in the debate over safe assets: their portfolios just about define such assets. This paper conveys the message that reserve managers need not…

Fed blog suggests high bank reserves are better for financial stability

February 20, 2019

Basel III, Federal Reserve, Liberty Street Economics, Liquidity

Stressed Outflows and the Supply of Central Bank Reserves Ryan Bush, Adam Kirk, Antoine Martin, Phil Weed, and Patricia Zobel Since the financial crisis, banking regulators around the world have…

ESMA issues positive opinion on BaFin short selling ban on Wirecard AG

February 18, 2019

Bafin, ESMA, Short selling, Short selling bans

The European Securities and Markets Authority (ESMA) has issued an official opinion agreeing to an emergency net short position ban, for a period of two months, by the Bundesanstalt für…

ISLA: ESMA Publishes Key Priorities for 2019

February 18, 2019

CSDR, ESMA, ISLA, SFTR

ESMA has recently published its Supervisory Convergence Work Programme for 2019 (https://www.esma.europa.eu/file/50237/download?token=ry0ziDAM). Amongst other things, this contains references to both SFTR and CSDR. The full summary from ISLA is available…

Cassini Systems and Margin Reform launch service for uncleared margin rule regulations

February 17, 2019

Anna Reitman

Cassini Systems, collateral management technology, Margin Reform, non-cleared drivatives margin

Cassini Systems and Margin Reform, a management consultancy, announced a new joint service to assist all buy-side participants with understanding and implementing solutions for Uncleared Margin Rule (UMR) regulations. This…

ECB paper profiles the Euro IRS market

February 16, 2019

ECB, interest rate swaps

Working Paper Series The anatomy of the euro area interest rate swap market Silvia Dalla Fontana, Marco Holz auf der Heide, Loriana Pelizzon, Martin Scheicher Using a novel regulatory dataset…

ECB Working Paper: Money markets, collateral and monetary policy

February 15, 2019

collateral, ECB, Money Markets