News and Notes

Aladdin, Blackrock, BNY Mellon

The Bank of New York Mellon Corporation (“BNY Mellon”) and BlackRock, through its BlackRock Solutions business, announced today a strategic alliance to deliver integrated data, technology, and asset management servicing…

ICMA survey shows continuing steady growth in the European repo market – market size reaches EUR 7,739 billion

April 4, 2019

ICMA, Repo

The European Repo and Collateral Council (ERCC) of the International Capital Market Association (ICMA) has today released the results of its 36th semi-annual survey of the European repo market. The…

ESMA launches third EU-wide stress test exercise

April 3, 2019

CCP, ESMA, stress test

The European Securities and Markets Authority (ESMA) has today published the frameworkfor its third EU-wide Central Counterparties (CCPs) stress test, marking the launch of its latest CCP stress test exercise.…

Fed blog: Are New Repo Participants Gaining Ground?

April 3, 2019

Fed, Liberty Street Economics, Repo

Following the 2007-09 financial crisis, regulations were introduced that increased the cost of entering into repurchase agreements (repo) for bank holding companies (BHC). As a consequence, banks and securities dealers…

Basel Committee looks at a sectoral application of the countercyclical capital buffer

April 3, 2019

Basel Committee, Countercyclical Capital Buffer

In May 2017, the Basel Committee’s Research Task Force initiated a work stream on sectoral countercyclical capital buffers (CCyBs). It was tasked to produce two deliverables that would contribute to…

US regulators propose limits to big banks holding TLAC of other big banks

April 2, 2019

Regulatory, TLAC, US

The federal banking agencies on Tuesday proposed a rule to limit the interconnectedness of large banking organizations and reduce the impact from failure of the largest banking organizations. The proposal…

ICE Benchmark Administration Successfully Completes the Transition of LIBOR Panel Banks to the Waterfall Methodology

April 2, 2019

ICE Benchmark Administration, LIBOR, waterfall

News and Notes, News and Notes – Fintech

LONDON–(BUSINESS WIRE)– Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced that ICE Benchmark Administration Limited (IBA) has…

UBS survey: analysis of US bank tech spend finds growing gap

April 2, 2019

Anna Reitman

artificial intelligence, blockchain, cybersecurity, UBS

In late 2018 through early 2019, UBS Evidence Lab conducted phone interviews with 203 IT managers from 175 banks of varying sizes. Survey participants were asked about their technology strategies…

Report: The Future of Clearing, from the World Federation of Exchanges and Oliver Wyman

April 2, 2019

Clearing, World Federation of Exchanges

The World Federation of Exchanges (“WFE”), the global industry group for exchanges and central counterparties (CCPs), today published a joint report with Oliver Wyman examining the post-crisis developments that have…

Canada tightens rules on dividends withholding tax in a securities lending arrangement

April 1, 2019

Canada, Securities Lending

Generally, when a person borrows a share, he or she is obligated to make payments to the lender as compensation for any dividends paid on the share until such time…

Options Clearing Corp seclending CCP volume down 0.5% in March 2019 year over year

April 1, 2019

CCP, OCC, Securities Lending

OCC’s securities lending CCP activity was down 0.5 percent in new loans from March 2018 with 117,521 transactions last month. Year-to-date stock loan activity decreased 2.5 percent from 2018 with…

DTCC gains approval to expand sponsored repo business, makes first trade

April 1, 2019

New York/London/Hong Kong/Singapore/Sydney,April 1, 2019 – The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced its proposal to expand…

WSJ: New Benchmark Rate, Gunning to Replace Libor, Gains Traction

April 1, 2019

LIBOR, WSJ

Trading in forward contracts using the benchmark rate expected to replace Libor surged to a record this month. Interest-rate swaps are contracts that allow users to hedge or bet on…

Reuters: Banks should quickly adopt LIBOR alternatives: Swiss expert

April 1, 2019

LIBOR, Reuters, SARON, Switzerland

Banks should adopt alternative reference interest rates swiftly ahead of the expected end of Libor in 2021, said a Swiss expert and member of a panel developing the country’s alternative…

Basel Committee publishes follow-up reports on Basel III implementation assessments

April 1, 2019

The Basel Committee on Banking Supervision has published overviews of follow-up actions taken or planned by member jurisdictions as of end-2018 to address deviations from the Basel standards identified as…

ABA: FDIC Approves Proposal to Exclude Central Bank Deposits from SLR

March 31, 2019

ABA, FDIC, Leverage Ratio, SLR

March 29, 2019 The FDIC today approved a joint agency proposal to exclude central bank deposits from the denominator of the supplementary leverage ratio for banking organizations predominantly engaged in custody banking…

Federal Reserve Board releases additional information on its stress testing program

March 29, 2019

Federal Reserve, stress tests

The Federal Reserve Board on Thursday released a document providing additional information on its stress testing program. The release of the document follows an announcement in February that the Board…

CFTC Issues No-Action Relief to Facilitate Prime Brokerage Activities on SEFs

March 29, 2019

CFTC, Prime Brokerage, SEFs

The Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today announced it will provide no-action relief to facilitate prime brokerage activities on swap execution facilities…

Bolsa de Valores de Lima Offers New Securities Lending Platform

March 29, 2019

BVL, Peru, Securities Lending

TORONTO and LIMA, Mar 28, 2019 (Canada NewsWire via COMTEX) — Enhanced Securities Lending Platform enables non-Peruvian investors to borrow and lend securities in Peru and make available an additional…

Get the weekly SFM update – our March 29 newsletter is online

March 29, 2019

Headlines: How custodians are evolving client-facing tech: BBH (Premium); Maybe term SOFR based on repo rates doesn’t really matter; Finadium: Scenarios for a Cyber Collateral Attack; Buy-side trading dynamics on…

ECB paper: Does liquidity regulation impede the liquidity profile of collateral?

March 28, 2019

collateral, ECB, LCR

Kirsten Schmidt Working Paper Series No 2256 / March 2019 We analyze the pledging behavior of Euro area banks during the introduction of the liquidity coverage ratio (LCR). The LCR…

OCC’s Matt Wolfe expects more machine learning and distributed ledger technology in securities lending

March 27, 2019

Options Clearing Corp, Securities Lending

What Does the Future Hold for Securities Lending? By Matt Wolfe, OCC Vice President of Business Development March 25, 2019 Matt WolfeStrong personal relationships have always been a cornerstone of…

Fed research: Financial Stability Committees are more concerned with politics than taking action

March 26, 2019

Federal Reserve, Financial Stability Committees

New Financial Stability Governance Structures and Central Banks Rochelle M. Edge, J. Nellie Liang Federal Reserve Finance and Economics Discussion Series 2019-019 February 19, 2019 We evaluate the institutional frameworks…

ECB paper: ban on trading naked sovereign CDS in 2012 had greatest impact on systemic risk reduction for sovereigns

March 26, 2019

Europe, European Systemic Risk Board, systemic risk

News and Notes, News and Notes – Fintech

Effectiveness of policy and regulation in European sovereign credit risk markets: a network analysis Rebekka Buse Melanie Schienle Jörg Urban European Systemic Risk Board Working Paper Series No 90 March…

DTCC’s margin transit utility signs up six swaps dealers

March 25, 2019

Anna Reitman

DTCC-Euroclear GlobalCollateral, Margin Transit Utility, Societe Generale, Vanguard

DTCC announced that six dealers have signed up for the firm’s Margin Transit Utility (MTU) collateral settlement infrastructure. The six dealers are Goldman Sachs, J.P. Morgan, Morgan Stanley, Societe Generale,…

Risk: swaps traders have to learn repo for SOFR hedging

March 25, 2019

Repo, risk, SOFR

Jumbo SOFR swaps herald new world of repo betting A $6 billion interest rate swap that hit the market this week – and was quickly followed by a $3 billion…

Transparency requirements of EU Securitisation Regulation to be incorporated into Eurosystem collateral framework

March 24, 2019

collateral, ECB, securitisations

Eligibility requirements for loan-level data reporting in collateral framework to be adjusted to reflect EU Securitisation Regulation’s disclosure requirements Eligibility criteria for asset-backed securities to change at a future date,…

Eurex reaches 28 partners for Special Repo and General Collateral instruments program

March 24, 2019

Eurex, Repo

Eurex press release – interview with Frank Gast, Head of Funding and Financing Sales at Eurex Six weeks Eurex’s Repo Partnership Program – solid basis to accelerate further growth On…

SFTR to enter into force 11 April 2019

March 22, 2019

ISLA, SFTR

ISLA Announcement: SFTR – RTS Published in the Official Journal The SFTR RTS determining the timing of the reporting regime, have been published in the Official Journal of the EU…

Central Bank of Ireland Approves EquiLend MTF

March 22, 2019

Equilend, NGT

DUBLIN (March 22, 2019)—The Central Bank of Ireland has approved EquiLend Limited, the Dublin-based business of global securities finance technology provider EquiLend, to operate a multilateral trading facility (MTF) in…

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

March 22, 2019

Headlines: How custodians are evolving client-facing tech: Citi (Premium); Does securities lending matter for Salt Financial’s negative fee ETF?; A Standing Repo Facility as the new ceiling on US overnight…

ASIFMA asks for improvements in China’s securities lending rules

March 21, 2019

ASIFMA, Securities Lending

ASIFMA commented on securities lending in China in the report, “Foreign Institutional Investment in China: An Asset Management Perspective,” March 2019 We understand that China’s move to a T+2 settlement…

SmartStream Partners with Cassini Systems to Help Firms Meet Uncleared Initial Margin Obligations

March 20, 2019

LONDON–(BUSINESS WIRE)–Mar 20, 2019–SmartStream Technologies, the financial Transaction Lifecycle Management (TLM ® ) solutions provider, today announced its partnership with Cassini Systems, the leading provider of pre and post trade…

ISDA Publishes CDM 2.0 for Deployment and Opens Access to Entire Market

March 20, 2019

CDM, Common Domain Model, ISDA

NEW YORK, March 20, 2019 – The International Swaps and Derivatives Association, Inc. (ISDA) has today published the full version of the ISDA Common Domain Model (CDM) for interest rate…

Basel III Monitoring Report released – March 2019

March 20, 2019

This report presents the results of the Basel Committee’s latest Basel III monitoring exercise, based on data as of 30 June 2018. Through a rigorous reporting process, the Committee regularly…

Bowmark Capital backs buy-out of Pirum from Five Arrows Principal Investments

March 19, 2019

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