CCPs

CCP, Derivatives, Total Return Futures, Total Return Swaps

CCPs, CME, Eurex, Euronext, securities finance, topstory, Total Return Futures, Total Return Swaps

The markets are starting to talk more about Total Return Futures (TRF) as a realistic alternative to Total Return Swaps (TRS), which themselves are competition for securities finance products. TRFs…

Reuters: EU takes new step on derivative clearing, despite UK, U.S. concerns

December 3, 2018

CCPs, equivalency, Europe, Reuters

BRUSSELS (Reuters) – European Union governments backed on Monday a proposal that could force systemic foreign clearing houses with operations in the EU to relocate to the bloc if they…

Which money fund will be first to force price improvement on repo CCPs? (Premium)

November 20, 2018

CCP, cleared repo, Repo

buy-side, CCPs, cleared repo, Eurex, FICC, investments, Repo, topstory

Cleared repo is growing but rates remain about the same as in the bilateral market. How long will money funds accept this status quo? Or, how long can big cash…

Global regulatory committees say CCP adoption working but concentration of clearing firms is high

November 19, 2018

CCPs, CPMI, FSB

The Financial Stability Board (FSB), the Basel Committee on Banking Supervision (BCBS), the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published today…

ECB exec on the 3C’s of payment dangers: cryptos, cyber and CCPs

November 16, 2018

News and Notes – Fintech

Benoît Cœuré, CCPs, Central Banks, cryptocurrencies, cybersecurity

Excerpts from speech by Benoît Cœuré, chair of the Committee on Payments and Market Infrastructures (CPMI) and member of the Executive Board of the European Central Bank, at the Economics…

FSB consults on whether existing financial resources are enough for CCP resolution

November 15, 2018

CCPs, Financial Stability Board, FSB

Financial resources to support CCP resolution and the treatment of CCP equity in resolution Available as: PDF 15 November 2018 This discussion paper seeks comment on financial resources to support…

Finadium Big Ideas Quarterly Q4 2018 now online

November 7, 2018

Benchmarks, CCP, Securities Lending

agency lending, CCPs, SOFR, topstory

Our quarterly presentation on research, news and events. Finadium Securities Finance, Collateral and Derivatives subscription clients can log in and download the presentation here. If you are already logged in,…

Will the need for scale plus CCLF mean US repo dealer consolidation? (Premium)

November 6, 2018

CCP, Liquidity Management, Repo

CCLF, CCPs, dealers, FICC, PFMI, Rates & Repo 2018, Repo, topstory

At our Rates & Repo 2018 conference, the Capped Contingency Liquidity Facility (CCLF) was a hot topic. Maybe too hot. We’re seeing a potential driver for market consolidation. Continue reading

FT: EU pledges access to UK clearing houses in no-deal Brexit

October 30, 2018

Brexit, CCPs, EU, FT

Brussels has responded to financial industry calls for continued access to London’s capital markets by providing reassurance that EU groups will temporarily be able to use crucial derivatives clearing services…

Reuters: EU shows no sign of heeding U.S. threat over derivatives clearing

October 29, 2018

CCPs, ECB, European Union

The European Union is proposing to give the European Central Bank sweeping powers over foreign clearing houses in times of market stress, an EU document showed, as the bloc shows…

Bank of England publishes plans for financial services regulation post-Brexit

October 25, 2018

Bank of England, Brexit, CCPs

The package of communications published today sets out changes to our rules and binding technical standards arising out of EU Withdrawal. It also sets out further guidance on the process…

Reuters: UK derivatives clearers may get no-Brexit deal reprieve – EU document

October 25, 2018

Brexit, CCPs, Clearing

The European Union might grant temporary permission for clearing houses in Britain to continue serving EU customers if there is a no-deal Brexit next March, an EU document seen by…

London Stock Exchange Group to increase majority shareholding in LCH Group

October 22, 2018

CCPs, LCH, LSEG

London Stock Exchange Group plc (“LSEG”) announces that it is in the process of acquiring further shares in LCH Group Holdings Limited (“LCH”), which will increase its majority ownership of…

CFTC Commissioner Rostin Behnam on CCP risk management

October 21, 2018

Behnam, CCPs, CFTC

Keynote Remarks of CFTC Commissioner Rostin Behnam at the Federal Reserve Bank of Chicago’s Fifth Annual Conference on CCP Risk Management, Chicago, Illinois CCP Governance and Risk Management CCP governance…

ESMA values EU derivatives market at EU 660 trillion with central clearing increasing significantly

October 20, 2018

CCPs, derivatives, ESMA

The European Securities and Markets Authority (ESMA) today publishes its first Annual Statistical Report (Report) on the European Union’s (EU) derivatives markets. The Report, based on data submitted under the…

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…

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…

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.…

Finadium: CCPs, Liquidity and Regulatory Disputes on Systemic Risk

August 9, 2018

CCP, Regulatory

CCPs, Liquidity, PFMI, Regulation, topstory

Why are regulators trying to oversee central counterparties (CCPs) outside their borders, and why are they making hostile speeches against one other? What is equivalence? How are CCPs meeting the…

ESMA publishes final report on EMIR anti-procyclicality margin measures for CCPs

May 29, 2018

News and Notes, Uncategorized

CCPs, EMIR, ESMA

EMIR recognizes that CCPs, competent authorities and ESMA should adopt measures to prevent and control possible procyclical effects arising from the risk-management practices adopted by CCPs. To this end, Article…

CCPs lag on risk management and recovery planning despite progress

May 3, 2018

News and Notes, Uncategorized

CCPs, CPMI-IOSCO, recovery, risk management

The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report, entitled Implementation monitoring of PFMI: follow-up Level 3 assessment of CCPs’ recovery…

BoE greenlights incident reporting requirement for UK CCPs after industry feedback

May 2, 2018

News and Notes, News and Notes – Fintech

Bank of England, CCPs, IT

In February 2018, the Bank of England issued a consultation paper on a proposed new rule relating to incident reporting for UK central counterparties (CCPs). The proposed new rule formalizes the…

With Deutsche Bank shrinking its balance sheet, who picks up the slack? (Premium)

May 1, 2018

CCP, Prime Brokerage

CCPs, Deutsche Bank, peer to peer, Prime Brokerage, topstory

Deutsche Bank announced plans last week to reduce the size of its global prime brokerage business with a focus on the US, as well as US rates trading. This will…

Competition in collateral trading notes, structured products and collateral packaged substitutes (Premium)

April 16, 2018

CCP, Collateral Management, Investments, Securitization

CCPs, CME, collateral trading notes, GCSA Capital, Invesco, K-Notes, structured products, topstory

We’re catching up on a few things following the conclusion of our Finadium Investors in Securities Lending Conference last week in New York. One notable item was a press release…

WFE and Oliver Wyman report examines market infrastructures’ role for market integrity

April 12, 2018

CCPs, Oliver Wyman, WFE

The World Federation of Exchanges, the global industry group for exchanges and central counterparties (CCPs), published a joint report with global management consultancy Oliver Wyman on the pivotal role of…

NY Fed’s Dudley: systemic vulnerabilities remedied by CCPs, triparty and MMF reform

March 26, 2018

CCPs, Federal Reserve Bank of New York, MMF, triparty

Some of the obvious systemic vulnerabilities exposed by the financial crisis have been remedied, said William Dudley, President and Chief Executive Officer of the New York Fed in remarks to the…

BoE consults on cyber reporting obligation for CCPs

February 20, 2018

News and Notes, News and Notes – Fintech

Bank of England, CCPs, cyber security

The Bank of England has released a consultation on a new rule for central counterparties relating to incident reporting. BoE currently has a supervisory expectation that CCPs promptly notify it…

ESMA issues conflict of interest guidelines for CCPs

February 8, 2018

CCPs, EMIR, ESMA

The European Securities and Markets Authority (ESMA) has issued final guidelines on the management of conflict of interests for central counterparties (CCPs). Under the European Market Infrastructure Regulation (EMIR) CCPs have…

ESMA finds CCPs resilient to extreme market shocks after stress test

February 2, 2018

CCPs, ESMA, stress tests

The European Securities and Markets Authority (ESMA) has published the results of its second EU-wide stress test exercise regarding Central Counterparties (CCPs) established in the European Union (EU). The results of the second EU-wide…

CCP recovery and resolution moves forward in EU parliament

January 26, 2018

CCPs, Economic and Monetary Affairs committee, Europe, European Parliament, Resolution and recovery

The European Parliament’s Economic and Monetary Affairs committee confirmed that a report drafted by Kay Winburne and Jacob von Weizsacker received support and was voted through. The position of the…

Risk: EU lawmaker wants cost-benefit analysis for CCP rejection

January 25, 2018

News and Notes, Uncategorized

Brexit, CCPs, European Union

European Parliament member Danuta Hübner is calling on the European Securities and Markets Authority and the European Central Bank to use a cost-benefit analysis when deciding to recognize or reject…

Do EU margin requirements on anti-procyclicality for CCPs help or hurt risk management?

January 15, 2018

Jonathan Cooper

CCP, Credit Exposure, Derivatives, ESMA, Europe, OTC Derivatives Clearing, Pro-cyclicality, Regulatory, Risk Management

CCPs, Clearing, ESMA, Procyclicality, topstory

EMIR wants CCPs to hold more margin, in effect making CCPs into virtual fortresses. But the costs associated are high and the potential to push risk into markets or firms…

Global CCP group warns on Basel rules under LR

January 10, 2018

Basel capital rules, CCP12, CCPs, Leverage Ratio, margin management

Due to the publication of Finalising post crisis reforms by the Basel Committee on Banking Supervision, CCP12 would like to highlight its continued concerns regarding the application of the Leverage Ratio on CCP…

ESMA consults on CCP anti-procyclicality margin measures

January 8, 2018

CCPs, EMIR, ESMA, Margin

The European Securities and Markets Authority (ESMA) has opened a public consultation on draft guidelines which aim to clarify the implementation of anti-procyclicality provisions for central counterparties (CCPs) under the…

ESMA review finds good supervision of CCPs’ default management

December 21, 2017

CCPs, ESMA

The European Securities and Markets Authority (ESMA) has issued the results of a peer review it conducted into how national competent authorities (NCAs) ensure that central counterparties (CCPs) comply with requirements under…

ESMA Q&A updates on benchmarks and indirect clearing on CCPs

December 18, 2017

CCP, ESMA, Europe, LIBOR

Benchmarks, CCPs, ESMA, indirect clearing, topstory

The European Securities and Markets Authority (ESMA) posted five updated Q&As on its website last week covering most of the major EU regulation. We highlight responses to questions on benchmarks…

Surveys launched on incentives to centrally clear OTC derivatives trades

December 15, 2017

BCBS, CCPs, CPMI, FSB, IOSCO

The EU’s proposals on CCP location open the door to staggering new risks

November 28, 2017

Jonathan Cooper

Bank of England, CCP, Central Counterparties, Derivatives, Europe

CCPs, European Commission, extraterritoriality, topstory

The European Commission’s proposals to force large CCPs to submit to supervision or even move to the EU may send some shivers down the neck of anyone trading via a…

Could Amazon or Facebook become a CCP?

November 13, 2017

CCP, Credit Exposure, Technology

CCPs, credit intermediation, innovation, technology, topstory

One problem in financial markets is the willingness of participants to trade with one another. Sometimes this is solved by banks operating as credit intermediaries. Other times an industry utility,…

BME Clearing gives clients direct access to repo and swaps segments

November 8, 2017

BME Clearing, CCPs, cleared OTC swaps, Repo Clearing

BME Clearing, the Central Counterparty (CCP) operated by BME, has introduced two new access models for institutional clients which allow the registration of trades in the REPO and SWAPS segments,…

US Office of Financial Research: How Safe are Central Counterparties in Derivatives Markets?

November 2, 2017

CCPs, credit default swaps, OFR

How likely is a central counterparty, or CCP, to default after a severe credit shock? This working paper uses credit default swap data to estimate the direct and indirect impacts…

ISDA replies to EU’s third-country CCP proposal, warns on location policy

October 10, 2017

CCPs, EMIR, ISDA

ISDA and its members welcome the European Union’s review of CCP supervision arrangements. We agree with the proposal’s objective of ensuring that EU supervisors are able to exercise appropriate and proportionate oversight…

LCH’s CollateralSeg should reduce gray areas of collateral ownership

LCH announced on August 10th that it will support a new account type representing pledged collateral for it’s SwapClear service. This should help reduce the risk that ownership rights can become…

Fed’s Powell says recalibrated Leverage Ratio, no capital for collateral and move to SA-CCR all on the table for CCP clearing benefits

June 24, 2017

CCPs, Federal Reserve, Leverage Ratio, Powell, SA-CCR

Central Clearing and Liquidity Governor Jerome H. Powell At the Federal Reserve Bank of Chicago Symposium on Central Clearing, Chicago, Illinois — Having pushed for the move to greater central…

The Five Cs of Bank and Client Success in Securities Finance

June 15, 2017

Anand Krishnan

Basel III, Cash management, Central Counterparties, Collateral Management, Derivatives, Hedge Funds, Investments, Repo

ALM, CCPs, collateral, Natixis, Repo, topstory

Today’s global investment banking market continues to be shaped by the need for innovation and synergies driven by an evolving regulatory landscape. We have identified the Five Cs for success…

Cinnober launches risk management system tailored uniquely to CCP needs

June 5, 2017

Risk and collateral management – fit for the new clearing landscape with growing volumes and versatile scope of cleared contracts Cinnober announces the launch of a stand-alone risk management solution…

ESMA consults on measures for CCPs to manage conflicts of interest

June 2, 2017

CCPs, ESMA

The European Securities and Markets Authority (ESMA) opened today a public consultation on future guidelines, which further clarify provisions stemming from the European Market Infrastructure Regulation (EMIR). ESMA’s consultation asks stakeholders…

EU relaxes derivatives rules – smart economic policy or a reaction to global competition?

May 8, 2017

Central Counterparties, Collateral Management, Derivatives, EMIR, Europe, Investments

CCPs, Clearing, collateral, derivatives, EMIR, Europe, topstory

The European Union last week proposed simpler and more efficient derivatives rules, a move that is widely accepted as helpful for a wide range of corporations, pensions and smaller banks.…

Finadium: Scenarios for the Next Collateral Crisis – download a free excerpt

May 4, 2017

Central Counterparties, Collateral Management, Derivatives, Investments, Liquidity Management, Market infrastructure, Regulatory, Repo, Technology

CCPs, Central Banks, collateral management, dealers, Regulatory, Repo, technology, topstory