News and Notes

Associated British Ports, LIBOR, SONIA

This Amended and Restated Final Terms amends and restates the Final Terms dated 23 May 2013 (the “Original Final Terms”), under which the Notes described herein (the “Notes”) were issued,…

Wells Fargo starts prime services for outsourced and agency trading

June 12, 2019

prime brokers, Wells Fargo

Wells Fargo Corporate and Investment Banking announced the launch of its Prime Trade Services group, which, combined with the Wells Fargo Prime Services platform, will give buy-side clients outsourced and…

Hong Kong SFC: Prime services and related equity derivatives activities

June 11, 2019

Hong Kong, prime brokers, SFC

This circular sets out the standards of conduct and internal controls the Securities and Futures Commission (SFC) expects of prime brokers (PBs), ie, financial institutions providing prime services1and conducting related…

Reuters: Prosecutors suspect 70 Deutsche Bank managers in dividend tax probe

June 7, 2019

Cum-ex, Deutsche Bank

German prosecutors have extended an investigation into a tax-stripping scheme, with around 70 current and former executives of Deutsche Bank now being treated as suspects, the Sueddeutsche Zeitung reported on…

Get the weekly SFM update – our June 7 newsletter is online

June 7, 2019

Headlines: Thursday News Roundup: analytics for hedge funds, the rumor mill, seclending pricing and more (Premium); US bank balance sheets show capacity – at what point would policymakers react?; Battle…

CPMI and IOSCO publish for public comment a paper on CCP auctions

June 6, 2019

CCPs, CPMI, IOSCO

The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) today published for public comment A discussion paper on central counterparty default management auctions.…

LCH: Best Practices in CCP Risk Management

June 4, 2019

CCPs, LCH, risk management

Clearing houses play a systemically important and central role in Financial Market Infrastructure. As they come under increasing scrutiny from members, clients, and regulators, it is important that central counterparties…

BoE official reveals early results of financial AI adoption survey

June 4, 2019

AI ethics, artificial intelligence, Bank of England, FCA

Excerpts from speech by James Proudman, executive director of UK Deposit Takers Supervision at FCA Conference on Governance in Banking, June 4 2019 The art of managing technology is an…

FSB publishes user guide for overnight risk-free rates

June 4, 2019

alternative risk free rates, FSB, LIBOR, RFRs

The Financial Stability Board (FSB) has today published a user guide to overnight risk-free rates (RFRs). The guide provides an overview of RFRs, details of how they are calculated, and…

FSB publicly consults on resolution-related disclosures and on the operationalisation of bank recovery and resolution

June 3, 2019

derivatives, FSB, recovery, Resolution

The Financial Stability Board (FSB) today published for public consultation two discussion papers that consider measures to improve the resolvability of global systemically important banks (G-SIBs). Following the global financial…

OCC seclending CCP up 0.3% in May 2019 year over year

June 3, 2019

CCP, OCC, Securities Lending

OCC’s securities lending CCP activity was up 0.3 percent in new loans from May 2018 with 119,589 transactions last month. Year-to-date stock loan activity decreased 1.7 percent from 2018 with…

ECB provides a one-off spread between €STR and EONIA

May 31, 2019

€STR, ECB, Eonia, ESTER

Spread between €STR and EONIA is calculated at 0.085% (8.5 basis points) Spread is based on methodology recommended by Working Group on euro risk-free rates Spread is to be used…

Get the weekly SFM update – our May 31 newsletter is online

May 31, 2019

Headlines: Finadium: ISDA’s Common Domain Model and the Digitization of Collateral; Plans for our institutional investor securities lending conference in Paris, 24 September 2019; We review ESMA’s consultation on SFTR…

Citco integrates S3 Partners’ Blacklight TCA suite

May 31, 2019

Citco, S3

The Citco Group of Companies, (“Citco”), a leading provider of asset servicing solutions to the global alternative investment industry, today announced a product partnership with S3 Partners, a leading fintech…

Bank of England working paper: The Cost of Clearing Fragmentation

May 31, 2019

Staff Working Paper No. 800 By Evangelos Benos, Wenqian Huang, Albert Menkveld and Michalis Vasios Fragmenting clearing across multiple central counter-parties (CCPs) is costly. This is because dealers providing liquidity…

ARRC Releases Recommended Fallback Language for Bilateral Business Loans and Securitizations

May 31, 2019

ARRC, LIBOR, securitizations, SOFR

The Alternative Reference Rates Committee (ARRC) today released recommended contractual fallback language for U.S. dollar (USD) LIBOR denominated bilateral business loans and securitizations. This follows the release of the ARRC’s…

Bank of England blog: CCP porting, are there lessons to be learnt from elsewhere?

May 28, 2019

Bank of England, CCP porting, CCPs, OTC derivatives

Post-crisis regulatory reforms have reshaped and increased the amount of clearing activity in the OTC derivatives market. An emerging issue is so-called “client porting” – i.e. how central counterparties (CCPs)…

Deutsche Börse’s Regulatory Reporting Hub to start SFTR services

May 28, 2019

Deutsche Borse, Eurex, SFTR

Deutsche Börse’s Regulatory Reporting Hub is adding a new solution for the Securities Financing Transactions Regulation (SFTR) to its suite of regulatory reporting services. This solution will help clients manage their…

FSB publishes peer review of implementation of the Legal Entity Identifier

May 28, 2019

Financial Stability Board, FSB, Legal Entity Identifier, LEI

The Financial Stability Board (FSB) published today a Thematic Review on Implementation of the Legal Entity Identifier (LEI). The LEI is a 20-character, alpha-numeric code that was introduced following the…

K&L Gates: New Japanese Securitization Risk Retention Rule and Its Impact on CLO Investors in Japan

May 24, 2019

CLO, Japan

In December 2018, the Financial Services Agency of Japan (the “JFSA”) proposed amendments to its regulations[1] under the Banking Act of Japan to introduce a new risk retention rule applicable…

US Senators introduce financial transaction tax proposal

May 24, 2019

Financial Transaction Tax, FTT, US

From The Hill: Sen. Bernie Sanders (I-Vt.) and Rep. Barbara Lee (D-Calif.) on Wednesday introduced legislation to tax stock, bond and derivatives trading. The Inclusive Prosperity Act, co-sponsored by Sen.…

Get the weekly SFM update – our May 24 newsletter is online

May 24, 2019

Headlines: Time for an SA-CCR in securities finance; Moody’s report details how blockchain is shaking up securitizations; FISL NYC 2019: changes in non-cash collateral and cash reinvestments (Premium); Targeting benchmarks…

DataLend analyzes global trade war impacts on SecFin industry

May 23, 2019

DataLend, The Purple, trade war

In its latest publication of The Purple, DataLend reviewed securities lending activity in 2018 to see what impact the ongoing trade wars have had on the demand to borrow various…

Manmohan Singh in the FT: Collateral Velocity is Rebounding

May 23, 2019

collateral velocity, FT, Manmohan Singh

In this guest post, Manmohan Singh updates the collateral reuse metric and shows that collateral velocity is rebounding. Singh is the author of Collateral and Financial Plumbing, a senior economist…

BrokerTec Launches BrokerTec Quote RFQ Trading Solution for European Repo Markets

May 22, 2019

BrokerTec, CME

LONDON, May 22, 2019 /PRNewswire/ — BrokerTec, a leading provider of electronic trading platforms and technology services in fixed income markets, today announced it will launch BrokerTec Quote, a new…

Clearstream enters Australian market with acquisition of Ausmaq Limited

May 21, 2019

Australia, Clearstream

Deutsche Börse Group’s post-trade services provider Clearstream is further expanding its offering in the investment funds space and enters the Australian market. The company has reached an agreement with National…

ISDA CDM Deployed to Help Deliver UK Digital Regulatory Reporting Pilot

May 21, 2019

Bank of England, CDM, ISDA

NEW YORK, May 21, 2019 – The International Swaps and Derivatives Association, Inc. (ISDA) has today announced the deployment of the ISDA Common Domain Model (ISDA CDM 2.0) to support…

ECB working paper on banks’ reaction to negative rates in the euro area

May 21, 2019

ECB, Europe, negative interest rates

ECB Working Paper Series Negative interest rates, excess liquidity and retail deposits: banks’ reaction to unconventional monetary policy in the euro area Selva Demiralp, Jens Eisenschmidt, Thomas Vlassopoulos Negative monetary…

ISDA: Key Trends in the Size and Composition of OTC Derivatives Markets

May 20, 2019

ISDA, OTC derivatives

This paper analyzes recent trends in the size and composition of over-the-counter (OTC) derivatives markets, using the latest data from the Bank for International Settlements (BIS) and ISDA. According to…

LCH RepoClear taps UnaVista as SFTR trade repository

May 20, 2019

LCH, LCH RepoClear, SFTR, Trade repositories, Unavista

LCH Group selects UnaVista for its SFTR-compliant trade repository UnaVista customers clearing through LCH’s RepoClear will be offered assisted reporting for SFTR RepoClear is Europe’s leading clearer of repos, €197tn…

Working Group on Euro Risk-Free Rates Launches Consultation on EONIA to €STR Transition

May 18, 2019

€STR, Benchmarks, Eonia, ESMA

The EUR risk-free rates working group published a consultation paper on the “EONIA to €STR legal action plan”, reaching out to market participants about the need of implementing a legal…

Central Bank of Ireland’s Kincaid: Towards Greater Transparency in Securities Lending

May 18, 2019

Central Bank of Ireland, Securities Lending, Transparency

Towards Greater Transparency in Securities Lending – Colm Kincaid, Director of Securities and Markets Supervision 15 May 2019 Opening Remarks to the International Securities Lending Association (ISLA) Morning Briefing Good…

ISDA Publishes Two Consultations on Benchmark Fallbacks

May 17, 2019

Benchmarks, ISDA, LIBOR

NEW YORK, May 16, 2018 – The International Swaps and Derivatives Association, Inc. (ISDA) has launched two new consultations on benchmark fallbacks – one covering adjustments that would apply to…

Get the weekly SFM update – our May 17 newsletter is online

May 17, 2019

Headlines: The value of the repo CCP in Canada; Benchmarking US cash collateral management fees in securities lending (Premium); Moody’s report details how blockchain is shaking up securitizations; FISL NYC…

Global Custodian: SRD II could pave the way for CSD innovation in data and STP

May 17, 2019

CSDs, Global Custodian, SRD II

The EU’s Shareholder Rights Directive II (SRD II) could be an excellent opportunity for intermediary businesses – chiefly issuer central securities depositories (CSDs) – to augment their STP (straight-through-processing) capabilities.…

Bloomberg: Fidelity brings securities lending in-house

May 15, 2019

fidelity, Goldman Sachs, Securities Lending

Fidelity Investments is cutting out its middleman, Goldman Sachs, when dealing with Wall Street short sellers. The money manager is bringing its stock-lending business in-house, according to a March 29…

BoE blog: is new banking regulation affecting derivatives clearing?

May 14, 2019

Bank of England, bank regulation, derivatives clearing

Just like the beginning of an unforeseen family argument, two key tenets of the post-crisis reforms have unexpectedly started to butt heads: the leverage ratio capital requirement and the mandatory requirement to centrally…

Get the weekly SFM update – our May 10 newsletter is online

May 10, 2019

Headlines: Getting it right on delegated reporting in SFTR; Should US repo be priced off of OBFR, SOFR or IOER? (Premium); Finadium Big Ideas Quarterly Q2 2019 now online; SFM…

Bank of England blog: Currency Mispricing and Dealer Balance Sheets

May 9, 2019

Bank of England, currency swaps

Deviations from covered interest parity (CIP) represent an arbitrage opportunity, at least in theory. In a new paper, we show that post-crisis financial regulation may explain why this mispricing persists…

Basel Committee reports global progress on Basel III but limited NSFR adoption

May 8, 2019

Basel Committee, Basel III

The Basel Committee on Banking Supervision today issued the Sixteenth progress report on adoption of the Basel regulatory framework. As noted by the Group of Central Bank Governors and Heads…

ISLA launches new website

May 8, 2019

ISLA, Securities Lending

The International Securities Lending Association (ISLA), a leading industry trade association representing the common interests of securities lending and financing market participants across EMEA, is proud to announce the launch…

BNY Mellon and AcadiaSoft partner for non-cleared margin calculations outsourcing

May 7, 2019

AcadiaSoft, BNY Mellon, non-cleared margin

Buy-side derivatives market participants are now able to fully outsource their entire non-cleared margin workflow, via the market’s first end-to-end collateral solution developed by BNY Mellon. Going forward, clients can…

Standard Chartered Bank and eSecLending Partner to Provide Agency Securities Lending

May 7, 2019

eSecLending, Standard Chartered

Standard Chartered has entered into a partnership with eSecLending, the specialist independent securities lending agent, to provide agency securities lending to its global institutional investor clients on both a custody…

Bursa Malaysia launches POC for securities lending on blockchain

May 6, 2019

blockchain, Bursa Malaysia, Securities Lending

Bursa Malaysia Berhad (“Bursa Malaysia” or “the Exchange”) embarks on a securities borrowing and lending (“SBL”) Proof-of-Concept (“POC”) – a first of its kind in the ASEAN, that explores the…

Fed blog: Selected Deposits and the OBFR

May 6, 2019

Liberty Street Economics, OBFR, Selected Deposits

The Federal Reserve Bank of New York recently decided to revise the composition of the Overnight Bank Funding Rate (OBFR), a reference rate measuring the cost banks face to borrow…

ESRB working paper: Has regulatory capital made banks safer? Skin in the game vs moral hazard

May 6, 2019

ESRB, macroprudential regulation

Working Paper Series No 91 / May 2019 Ernest Dautović The paper evaluates the impact of macroprudential capital regulation on bank capital, risk taking behaviour, and solvency. The identification relies…

BIS: OTC derivatives notional declines to $544 trillion, market value down to $9.7 trillion

May 5, 2019

Notional amounts of OTC derivatives declined from end-June to end-December 2018, from $595 trillion to $544 trillion. The market value of OTC derivatives fell from $10.3 trillion to $9.7 trillion,…

Eurex Repo up 30.2% in April 2019 volumes year over year

May 5, 2019

Mondo Visione: Eurex Repo, the leading provider for international financing in the secured money market business (repo and securities lending), saw an overall increase of 30.2 percent in average outstanding…

Federal Reserve Board invites comment on a proposal to apply netting protections to a broader range of financial institutions

May 3, 2019

Federal Reserve, netting