News and Notes

AcadiaSoft

AcadiaSoft Inc., the leading industry provider of risk and collateral management services for the non-cleared derivatives community, today announced that all firms in-scope for Phase 3 of the five-year Initial…

State Street completes Charles River acquisition, announces advisory board and CEO

October 5, 2018

Charles River Development, State Street

State Street announced that it has completed its acquisition of Charles River Development, which is expected to result in the “industry’s first-ever global interoperable platform connecting the front, middle and…

Get the weekly SFM update – our October 5 newsletter is online

October 5, 2018

Headlines: Introducing the Semantic Blockchain in Capital Markets, a guest post from OpenRisk; It’s go time for signing stay resolution agreements in securities finance (Premium); Electronic RFQ Markets: What’s in it for…

Fed dealer survey on securities financing terms finds little market change from last quarter

October 4, 2018

Federal Reserve, SCOOS

Summary The September 2018 Senior Credit Officer Opinion Survey on Dealer Financing Terms collected qualitative information on changes over the previous three months in credit terms and conditions in securities…

NEX European repo up 10%, US Treasury repo down 4% for September 2018 year over year

October 4, 2018

NEX, Repo

US Repo Fixed Income Clearing Corporation (FICC) volumes climbed back to the 600 billion per day range in September with the return of a handful of specials in the market,…

Tradeweb posts record trade volumes in September 2018

October 4, 2018

For the month of September 2018, Tradeweb Markets set a new record for trade volume. Activity was higher year-over-year and month-over-month in nearly all products on the platform. Average daily…

SocGen CIB launches fintech incubator for global markets

October 4, 2018

fintech, Societe Generale

With this launch, Societe Generale Corporate & Investment Banking (SG CIB) adopts a pioneering approach in incubation for start-ups specialising in market activities, while strengthening its support to the Fintech…

Basel Committee Monitoring Report starts to look at compliance with final Basel III minimum requirements

October 4, 2018

Basel III, monitoring report

Basel III monitoring results published by the Basel Committee Fully phased-in final Basel III capital shortfalls more than 70% lower for large internationally active banks compared with end-2015 All banks…

ESMA’s Maijoor highlights risks of no UK CCP recognition under Brexit

October 4, 2018

Brexit, CCPs, ESMA

The state of implementation of MIFID II and preparing for Brexit WFE Annual Meeting 2018 – Hotel Grande Bretagne, Athens, Greece Steven Maijoor Chair European Securities and Markets Authority The…

ISDA and KWM Publish Practical Framework for Constructing Smart Derivatives Contracts

October 3, 2018

CDM, Common Domain Model, ISDA

The International Swaps and Derivatives Association, Inc. (ISDA) and law firm King & Wood Mallesons (KWM) have published a new whitepaper that sets out the steps for developing smart derivatives…

ICMA publishes discussion paper on CSDR mandatory buy-ins and securities financing transactions

October 3, 2018

CSDR, ICMA

ICMA has published a discussion paper on CSDR mandatory buy-ins and securities financing transactions. The paper is intended to complement ICMA’s previous work on the topic of CSDR Settlement Discipline,…

OCC securities lending CCP up 6.9% in September 2018 year over year

October 3, 2018

CCP, OCC, Securities Lending

Securities Lending: OCC’s securities lending CCP activity was up 6.9 percent in new loans from September 2017 with 203,694 transactions last month. Year-to-date stock loan activity increased 17.0 percent from…

ECB: removing repo from the Leverage Ratio would be a bad idea

October 3, 2018

ECB, Leverage Ratio, Repo

This article summarises the key findings from a counterfactual exercise where the effect of removing repo assets from the leverage ratio on banks’ default probabilities is considered. The findings suggest…

ECB: G-SIB framework encourages balance sheet window-dressing

October 3, 2018

ECB, G-SIBs, window-dressing

This article evaluates whether the global systemically important bank (G-SIB) framework has incentivised banks to adopt window-dressing behaviour, and whether their engagement in capital market activities has facilitated it. Window-dressing…

FIA: Mapping Clearing Interdependencies and Systemic Risk

October 2, 2018

CCPs, Clearing, network theory

Global regulators are becoming increasingly aware of the importance of market infrastructures in the systemic risk topography. In particular, regulators are recognizing the need to understand the interconnections between clearinghouses…

FT: European banks weigh leaving UK derivatives market

October 2, 2018

derivatives, Europe, FT

European banks are considering whether to begin closing out their trillions of pounds’ worth of derivatives positions in London in the coming months as the UK struggles to finalise an…

Euroclear UK & Ireland offers dollar settlement in central bank money through the Federal Reserve

October 1, 2018

Euroclear, Euroclear UK & Ireland, Federal Reserve

London/New York, 1 October 2018 – Euroclear UK & Ireland (EUI) has become the first foreign financial market infrastructure to connect to the Federal Reserve’s National Settlement Service, enabling clients…

CFTC Chairman Giancarlo Releases Cross-Border White Paper

October 1, 2018

CCPs, CFTC, OTC derivatives

Washington, DC – Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo released a white paper titled “Cross-Border Swaps Regulation Version 2.0: A Risk-Based Approach with Deference to Comparable Non-U.S.…

ESMA launches consultation on stress testing rules for money market funds

September 28, 2018

ESMA, money market funds, stress testing

The European Securities and Markets Authority (ESMA) has today opened a public consultation on how European money market funds (MMFs) should conduct their internal stress testing. While MMFs invest in…

Get the weekly SFM update – our September 28 newsletter is online

September 28, 2018

Headlines: Regulatory changes and the need for collateral flexibility, a guest post by State Street; How the Basel change on settled-to-market will impact balance sheets (Premium); A Framework for evaluating…

Charles River and fintech Cassini join forces to automate margin estimation

September 27, 2018

Cassini, Charles River Development, collateral management, margin management

Charles River Development and Cassini Systems have formalized a business alliance to automate the calculation of margin estimates and provide advanced pre- and post-trade analytics in the Charles River Investment…

IHS Markit launches initial margin calculation service for OTC derivatives

September 27, 2018

IHS Markit, Initial Margin

IHS Markit announced the launch of its Initial Margin Calculation Service with broad coverage for non-cleared derivatives across interest rates, equities, FX, credit and commodities. A complex, five-phase international framework…

ESMA publishes final report amending RTS on the clearing obligation for intragroup transactions

September 27, 2018

ESMA, intragroup clearing

The European Securities and Markets Authority (ESMA) has today published its Final Report on the Clearing Obligation under EMIR (no 6). The report presents a new set of draft regulatory…

NEX TriOptima simplifies IM with single trade file process

September 27, 2018

TriOptima, the award-winning infrastructure service provider for OTC derivatives, announces today that it can simplify compliance with the initial margin (IM) rules with its end-to-end solution that requires just one…

Ropes & Gray: Considerations for the Buy Side on the ISDA 2018 U.S. Resolution Stay Protocol

September 27, 2018

ISDA, QFCs, Qualified Financial Contracts, Reps & Gray, stay protocols

ISDA recently published the ISDA 2018 U.S. Resolution Stay Protocol (the “Protocol”), which is now open for adherence. This Client Alert provides further information about the Protocol and considerations for…

Risk: Banks will not use NSFR to judge funding risk

September 27, 2018

Bankers say they have little intention of using new rules governing structural liquidity as a framework for judging their economic risks internally, because the calibration is too poor to be…

CPMI releases latest Red Book payments statistics in new interactive format

September 27, 2018

BIS, CPMI, Data

The Committee on Payments and Financial Market Infrastructures (CPMI) today published new data on payments and financial market infrastructures through to end-2017. With this year’s edition, the information is presented…

Openlink launches next generation of commodities and financial trading and risk management solutions

September 27, 2018

Ion, Openlink

ION, the largest global provider of trading, analytics and risk management solutions for capital markets, commodities and treasury management, today announced the availability of Openlink v17, the next release of…

Circle launches USD stable coin

September 27, 2018

Circle, stablecoin

Today Circle and the CENTRE open source consortium introduced a service to tokenize US dollars and use those dollars over public blockchains on the internet: USD//Coin, also known as USDC.…

FIS Adaptiv: Exposure Monitoring in a Fully Margined World

September 26, 2018

Adaptiv, exposure monitoring, FIS, risk

In a perfectly margined world, variation margin (VM) and initial margin (IM) should cover both current and potential future exposure with a highdegree of confidence. In this case, under certain provisos,…

FSB and IMF publish the 2018 progress report on G20 Data Gaps Initiative

September 26, 2018

Data Gaps Initiative, FSB, G20, IMF

The Financial Stability Board (FSB) and International Monetary Fund (IMF) today published the third progress report on the implementation of the second phase of the G20 Data Gaps Initiative (DGI-2).…

ESMA: Liquidity in EU fixed income markets – Risk indicators and EU evidence

September 25, 2018

Bonds, ESMA, Fixed Income, Liquidity

Over the last few years, market analysts have pointed at an overall reduction of liquidity in fixed income markets. Market liquidity is important to ensure the efficient functioning of financial…

ARRC Releases Consultations on Fallback Contract Language for Floating Rate Notes and Syndicated Business Loans for Public Feedback

September 24, 2018

ARRC, LIBOR, SOFR

The Alternative Reference Rates Committee (ARRC) released consultations on U.S. dollar LIBOR fallback contract language for floating rate notes and syndicated business loans for public feedback. These consultations outline draft…

BIS on global liquidity: changing instrument and currency patterns

September 24, 2018

BIS, debt securities, Liquidity

Global liquidity: changing instrument and currency patterns BIS Quarterly Review | September 2018 | 23 September 2018 by Iñaki Aldasoro and Torsten Ehlers International (cross-border and foreign currency) credit, a…

US regulations approve amendments to swap margin rule

September 21, 2018

netting, swap margin, US

Five federal agencies approved final amendments to swap margin requirements to conform with recent rule changes that impose new restrictions on certain qualified financial contracts of systemically important banking organizations…

ECB Draghi’s letter to EU Parliamentarian says no central bank digital bank cryptocurrency for now

September 21, 2018

central bank digital currency, cryptocurrencies, ECB

Frankfurt am Main, 12 September 2018 L/MD/18/306 Honourable Member of the European Parliament, dear Mr Fernández, Thank you for your letter, which was passed on to me by Mr Roberto…

Basel Committee reduces advantages of “settled-to-market” derivatives

September 21, 2018

BIS, LCR, NSFR, Settled to market

The Basel Committee today issued responses to Frequently Asked Questions (FAQs) related to the treatment of settled-to-market (STM) derivatives under the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio…

Get the weekly SFM update – our September 21 newsletter is online

September 21, 2018

Headlines: European regulatory reporting for a global audience, a guest post from UnaVista; Stablecoins could be the link between crypto and securities finance; Envisioning the next evolution of the securities…

ARRC says term SOFR on track for 2021

September 20, 2018

ARRC, SOFR, term SOFR

ARRC Releases FAQs to Build on Efforts to Engage and Educate Market Participants and Other Stakeholders The Alternative Reference Rates Committee (ARRC) has released a new set of frequently asked…

DataLend says H1 2018 revenue in securities finance was $5.47 billion (lender to broker activity)

September 20, 2018

DataLend has released the fifth edition of The Purple magazine. Other data points of note include: NGT trade count and notional Cash vs. non-cash Australia securities finance market breakdown Information…

IOSCO issues policy measures to protect investors of OTC leveraged products

September 19, 2018

IOSCO, OTC derivatives, retail

The Board of the International Organization of Securities Commissions (IOSCO) today issued a final report providing measures for securities regulators to consider when addressing the risks arising from the marketing…

BoE’s Haldane says central banks must rely on “folk wisdom” to build public trust

September 19, 2018

Andrew Haldane, Bank of England, Central Banks

Folk Wisdom Andrew G Haldane Chief Economist Bank of England 100th Anniversary of the Bank of Estonia Tallinn, Estonia 19 September 2018 Central banks, like all public institutions, were created…

Risk: Brexit threatens UK-based banks’ corporate repo funding

September 18, 2018

Brexit, Corporate Bonds, Repo

UK-based trading desks are bracing for tough post-Brexit obstacles to repo trading with the European Union’s non-financial companies – a source of funding that will grow in importance under incoming…

New York Fed Sells Remainder of Maiden Lane LLC Securities; Approximately $2.5 Billion Net Gain Generated for U.S. Public from the Portfolio

September 18, 2018

Federal Reserve, Maiden Lane, NY Fed

The Federal Reserve Bank of New York (New York Fed) today announced the completion of the sale of the remaining securities in the Maiden Lane LLC (ML LLC) portfolio. Sales…

BIS Markets Committee analyses changes in fast-paced electronic markets

September 18, 2018

BIS, electronic trading, Liquidity

Trading in foreign exchange and other fast-paced electronic markets is increasingly spread across a range of platforms, with non-bank intermediaries, most notably principal trading firms, gaining a stronger foothold. In…

EquiLend opens Dublin office

September 18, 2018

Dublin, Equilend, Europe, Ireland

DUBLIN (Sept. 18, 2018)—EquiLend, a leading provider of trading, post-trade, market data and clearing services for the securities finance industry, today announces the opening of its office in Dublin to…

FT: EBA Chief Enria says back-to-back trading must stay after Brexit

September 18, 2018

Andrea Enria, back-to-back trading, EBA, Europe

Andrea Enria, the head of the European Banking Authority, told the FT in an interview that a contentious way of transferring risk across borders was an indispensable “backbone” of global…

Bank of England launches Public Register for the UK Money Markets Code

September 17, 2018

Bank of England, Money Markets Code

The Bank of England’s Money Markets Committee (MMC) – comprised of market participants from a wide range of banks, other financial and non-financial institutions – has launched a Public Register…

Nasdaq clearing member default costs CCP EUR 114 million

September 17, 2018

CCP, default, Nasdaq