News and Notes

Korea, KOSPI, Short selling

A growing number of investors are rushing to short Seoul stocks, imposing a double whammy for Korea’s stock market that was already hit hard by global uncertainties raised by the…

Get the weekly SFM update – our August 9 newsletter is online

August 9, 2019

Headlines: It’s the Fed vs. The Clearing House on US real-time payments (Premium); What quantum full-stack means for financial services (Premium); Finadium Big Ideas Quarterly Q3 2019 now online; LSEG…

Judge dismisses QS Holdco lawsuit against prime brokers based on claim ownership

August 8, 2019

Equilend, lawsuit, prime brokers, QS Holdco

QS Holdco’s lawsuit against major prime brokers and EquiLend was dismissed by New York Federal Judge Richard Sullivan on Tuesday. The lawsuit alleged that the defendants conspired to crush the…

Industry associations call for money market funds to be acceptable collateral for initial margin

August 8, 2019

Initial Margin, money market funds

Letter from industry association to the Commodity Futures Trading Commission, August 1, 2019 Re: Posting Cash and Money Market Funds for Initial Margin The International Swaps and Derivatives Association (“ISDA”),…

Charles Schwab announces connectivity to Bloomberg’s stock loan trading platform

August 7, 2019

Bloomberg, Schwab, stock loan

Schwab has fully built out its automated connectivity to the new Bloomberg Stock Loan Trading Platform. Bloomberg Electronic Trading replaces free-form trading via BBG chat & mail. Finadium research clients…

ESMA calls for data experts to join industry advisory group

August 7, 2019

Data, ESMA

The European Securities and Markets Authority (ESMA) has issued a call for candidates for its newly-established Data Advisory Group (DAG). ESMA is seeking individuals with expertise on issues related to market data…

ISLA: EBA Advises Against Swift Implementation of Mandatory Haircuts for SFTs in Bank Capital Rules

August 5, 2019

EBA, Haircuts, ISLA, SFTs

The European Banking Authority today published its technical advice to the European Commission on the implementation into EU law of the latest Basel III (sometimes referred to as Basel IV)…

ECB SESFOD survey says funding demand decreased through May 2019

August 5, 2019

ECB, Europe, funding, SESFOD

Results of the June 2019 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets (SESFOD) 31 July 2019 Credit terms eased for almost all counterparties…

Deutsche Börse launches buy-in agent service for CSDR

August 2, 2019

CSDR, Deutsche Borse, Securities Lending

News and Notes, Uncategorized

Deutsche Börse Group is taking another important step in its efforts to best support both the financial industry and the regulatory agenda. With the Deutsche Börse Buy-in Agent Service, the…

Get the weekly SFM update – our August 2 newsletter is online

August 2, 2019

Anna Reitman

weekly update

Headlines: Is there a culture gap in hedge funds building treasury divisions? (Premium); Buy-side UST/repo clearing on FICC: risk, process and math (Premium); SOFR linked paper issuance had a good…

OCC securities lending CCP up 10.5% in July 2019 year over year

August 1, 2019

CCP, OCC, Securities Lending

OCC’s securities lending CCP activity was up 10.5 percent in new loans from July 2018 with 114,818 transactions last month. Year-to-date stock loan activity has decreased 2.1 percent from 2018…

ARRC Releases Matrix and Comparison Chart on SOFR Floating Rate Notes Conventions

August 1, 2019

ARRC, Floating Rate Notes, LIBOR, SOFR

The Alternative Reference Rates Committee (ARRC) today released the Secured Overnight Financing Rate (SOFR) Floating Rate Notes (FRNs) Conventions Matrix. The Matrix identifies considerations relevant to using SOFR – the…

DerivSource: FIX Launches New Messages for Post-Trade Space; More to Come in Repo & Sec Lending

August 1, 2019

DerivSource, FIX Trading, Repo, Securities Lending

The industry-driven standards body, FIX Trading Community, has launched a new set of message types geared for the post-trade space by supporting periodic future payment management. Use of these new…

Fed cuts rates, ends quantitative tightening

July 31, 2019

Federal Reserve, Quantitative Easing, quantitative tightening

Statement Regarding Reinvestments of Principal Payments from Treasury Securities, Agency Debt, and Agency Mortgage-Backed Securities July 31, 2019 At its meeting on July 30-31, 2019, the Federal Open Market Committee…

ISDA: Bloomberg Selected as Fallback Adjustment Vendor

July 31, 2019

Benchmarks, Bloomberg, ISDA

ISDA today announced that Bloomberg Index Services Limited (BISL) has been selected to calculate and publish adjustments related to fallbacks that ISDA intends to implement for certain interest rate benchmarks…

ESMA publishes feedback on guidelines for SFTR reporting under Articles 4 and 12

July 31, 2019

ESMA, reporting, SFTR

The responses are available at https://www.esma.europa.eu/press-news/consultations/consultation-guidelines-reporting-under-articles-4-and-12-sftr

ISDA finds market participants prefer historical mean/median spread adjustment for LIBOR replacements

July 31, 2019

Benchmarks, fallbacks, ISDA, LIBOR

ISDA received feedback from 85 entities to the Supplemental Consultation on Spread and Term Adjustments for Fallbacks in Derivatives Referencing USD LIBOR, CDOR and HIBOR and Certain Aspects of Fallbacks…

Cooley: SEC’s Investor Advisory Committee considers “proxy plumbing” recommendations

July 31, 2019

Cooley LLP, Custodians, proxy voting, Securities Lending

Inaccuracies in vote count. To say that there doesn’t seem to be a lot of confidence in the accuracy of the vote count would be an understatement. The Securities Transfer…

Bank of England and PRA finalise the Resolvability Assessment Framework

July 30, 2019

Bank of England, bank resolution, PRA

Resolution is the process by which authorities intervene to manage the failure of a bank in an orderly way. This process reduces risks to depositors, the financial system, and public…

CACEIS to acquire KAS Bank

July 30, 2019

CREDIT AGRICOLE SA: Launch of recommended public offer in cash by CACEIS for all securities in KAS BANK This is a joint press release by KAS BANK N.V. (“KAS BANK”)…

Moscow Exchange’s OTC derivatives market migrates to Unified Collateral Pool

July 30, 2019

collateral, MOEX, Moscow Exchange, OTC derivatives

MOEX’s Standartised OTC Derivatives Market migrated to the Unified Collateral Pool, allowing securities to be posted as collateral for trades on the market. The Unified Collateral Pool model delivers cross-market clearing…

Australian Securities and Investments Commission to consult market on securities lending and ‘substantial holding’ disclosure

July 29, 2019

ASIC, Australia, Securities Lending

ASIC today published Consultation Paper CP 319 on securities lending by agents, and subsequent disclosure of a substantial holding in a listed entity. CP 319 explains how the relevant interest provisions in…

Get the weekly SFM update – our July 26 newsletter is online

July 26, 2019

Headlines: One idea for rebuilding the specials market in securities finance (Premium); How compliance tech is evolving in a distributed world (Premium); Details on the DTCC’s plan to launch a…

Wematch launches Euro Interest Rate Swaps matching and negotiating platform for banks

July 25, 2019

Euro IRS, OTC derivatives, Wematch

Platform goes live with an initial group of 10 banks, including J.P. Morgan, RBC, HSBC and Societe Generale, which will match and negotiate Euro IRS curves, butterflies, and basis structures:…

AcadiaSoft Announces Technology Partnership with CloudMargin

July 24, 2019

AcadiaSoft, CloudMargin

Norwell, MA, July 24, 2019: AcadiaSoft today announced a new technology partnership with CloudMargin that will provide its clients with a seamless front-to-back process for collateral and margin management. The…

Basel Committee and IOSCO announce one year delay on phase 5 margin implementation for OTC derivatives

July 23, 2019

Basel Committee, IOSCO, Margin, OTC derivatives, Phase 5, UMR

The Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO) acknowledge the progress that has been made to implement the framework for margin requirements for non-centrally…

Nordea Markets: Why are foreign central banks allowed to tighten USD liquidity?

July 23, 2019

Federal Reserve, Nordea Markets, Repo, US liquidity

We continue to believe that dollar scarcity is a key driver of markets, be it the effective Fed Funds rate or the foreign exchange market. While the Fed is mulling…

DTCC says sponsored repo hit $376 billion in Q2 2019

July 23, 2019

DTCC’s Mike McClain, General Manager of equity clearing and settlement at DTCC’s National Securities Clearing Corporation (NSCC), and Laura Klimpel, Managing Director of Clearing Agency Services, told Finadium that sponsored…

Bank of Canada to become the administrator of Canadian Overnight Repo Rate Average (CORRA)

July 22, 2019

Bank of England, CORRA, interest rate benchmark

The Bank of Canada last week announced its intention to become the administrator of the Canadian Overnight Repo Rate Average (CORRA), a key interest rate benchmark for financial markets. The…

ESMA critiques European regulatory oversight of CCPs

July 22, 2019

CCPs, ESMA, Repo

The European Securities and Markets Authority (ESMA) has today published its annual peer review report on the overall supervision of EU Central Counterparties (CCPs) by National Competent Authorities (NCAs). The…

WSJ: Supply Surge Sends Overnight Rates Above 10-Year Yields

July 21, 2019

Repo, WSJ

The persistent supply of U.S. government debt flooding the bond market this year has done little to raise bond yields, except in the market for the shortest-term securities. The cost…

FT: Options Clearing Corp readies plan to boost capital

July 19, 2019

OCC, PFMI

The US’s Options Clearing Corp is putting the finishing touches on a long-awaited new plan to boost its capital, risking unhappiness among customers and shareholders as it tries to shore…

FSB extends timelines for SFT minimum haircut standards implementation

July 19, 2019

FSB, Minimum Haircuts, SFTs

The Financial Stability Board (FSB) today announced adjustments to the implementation timelines for its recommendations on securities financing transactions (SFTs), specifically those related to minimum haircut standards for non-centrally cleared…

ESMA readies stress testing requirements for money market funds

July 19, 2019

ESMA, money market funds

The European Securities and Markets Authority (ESMA) has today issued two sets of guidelines regarding the stress testing of money market funds and reporting on money market funds to national…

Eurekahedge: BNP Could Rise as Top Prime Broker in Asia on Deutsche Bank Deal

July 19, 2019

BNP Paribas, Deutsche Bank, Eurekahedge, Prime Brokerage

From Bloomberg: As Deutsche Bank AG and BNP Paribas SA sort out a deal on servicing the German lender’s hedge-fund clients, one of the prizes at stake is the Asian…

Get the weekly SFM update – our July 19 newsletter is online

July 19, 2019

Headlines: An opportunity for market-led reform in equity-for-equity collateral exchanges; ISLA leads overhaul of securities lending performance measurement (Premium); LIBOR to SOFR: what will make the swaps market transition?; Key…

Liquidnet: Swiss Exchange a winner after EU equivalence loss

July 17, 2019

Anna Reitman

EU, exchanges, Switzerland

The loss of equivalence to Swiss markets on July 1st and the introduction of the Swiss Ordinance have already led to a change in liquidity formation and the immediate winner…

Fed blog: How Do Large Banks Manage Their Cash?

July 17, 2019

cash management, IOER, Liberty Street Economics

As the aggregate supply of reserves shrinks and large banks implement liquidity regulations, they may follow a variety of liquidity management strategies depending on their business models and the interest…

EFAMA: liquidity concerns about ETFs are misplaced

July 17, 2019

EFAMA, ETFs, Europe, Liquidity

EFAMA recently finalised a Comment Paper in response to the ECB’s November 2018 findings around liquidity and counterparty risks in ETFs, included in the ECB’s semi-annual Financial Stability Review. While…

Global Investor: LCH to end Euro repo trading in London after Paris switch

July 17, 2019

LCH, Repo

Euro repo and bond trades will be completely withdrawn from London-based LCH Ltd at the start of next year. The full article is available at https://www.globalinvestormagazine.com/articles/3692895/lch-to-end-euro-repo-trading-in-london-after-paris-switch

Bank of England’s Hauser says bigger central bank balance sheets are here to stay

July 17, 2019

Andrew Hauser, Bank of England

Waiting for the exit: QT and the Bank of England’s long-term balance sheet Speech given by Andrew Hauser, Executive Director, Markets At the European Bank for Reconstruction and Development, London,…

Regulation Asia: HKMA Asks Banks to Prepare Systems for Revised Leverage Ratio

July 15, 2019

HKMA, Hong Kong, Leverage Ratio

Both the revised leverage ratio treatment of client cleared derivatives and the revised disclosure requirements will come into effect in Hong Kong on 1 January 2022, in line with the…

Fed blog: Large Bank Cash Balances and Liquidity Regulations

July 15, 2019

cash balances, Liberty Street Economics, Liquidity

The Federal Open Market Committee (FOMC) has recently communicated its aim to continue implementing monetary policy in a regime that maintains an ample supply of reserves, though with a significantly…

SIFMA issues SOFR primer

July 15, 2019

Anna Reitman

alternatives to LIBOR, SIFMA, SOFR

The publication of LIBOR is not guaranteed beyond 2021. To ensure financial stability, a significant, coordinated effort is underway to transition to alternative interest rate benchmarks. With an estimated $200…

Get the weekly SFM update – our July 12 newsletter is online

July 12, 2019

Headlines: Finadium: Declining Securities Finance Volumes: Pricing, Problems and Solutions; How collateral harmonization is progressing in Europe (Premium); Cyber report: what’s happening for security in finance; Understanding Deutsche Bank’s “radical…

India’s YES Bank makes blockchain commercial paper issuance

July 11, 2019

News and Notes, News and Notes – Fintech

blockchain, Commercial Paper, India, YES Bank

Financial technology solutions provider MonetaGo has today announced that a commercial paper has been digitally issued in Asia for the first time using blockchain technology. MonetaGo completed this transaction through…

ENSO launches financing replication and reconciliation tools

July 10, 2019

Enso, financing replication

ENSO provides effective Financing Replication and Reconciliation tools that consolidate financing data across prime brokers. The services highlight the drivers of costs as well as potential avenues to reduce manual…

Fed releases updated Statement on IOSCO Compliance for the EFFR, OBFR, and Treasury Repo Reference Rates

July 10, 2019

Federal Reserve, IOSCO, Repo reference rates