Posts Tagged ‘OTC’
Friday, April 8th, 2011
Did you ever have a friend who is in the know of what “everybody” or “they” say? You know the type. People who like to make broad arguments and assume it is universally supported by some mysteriously random authority.
I thought of this when reading a report in Crain’s this week of how, surprisingly, Citadel CEO Ken Griffin came out in support of Dodd-Frank. The problem is Griffin came out in support of Dodd-Frank months ago, a point we made at the time. And he is not the only one. Other managers and investment professionals have supported putting more restrictions on markets, particularly over-the-counter markets.
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Tags: Federal Reserve, Financial Regulatory Reform, OTC
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Friday, March 25th, 2011
A prominent criticism of the Commodity Futures Trading Commission’s (CFTC) swaps rulemaking as commanded by the Dodd-Frank Wall Street Reform and Consumer Protection Act is that many key definitions of terms remain blank while tangential provisions are vetted. It could be likened to setting standards for dogs when no one is quite sure what a “dog” is.
For example, what is a “swap”? The CFTC is addressing dealers in them, major participants in them, execution facilities for them etc. but has yet to put a ring fence around what are swaps. All we know is that Dodd-Frank treats them as “different” from the instruments – like futures contracts – that the CFTC has overseen for generations.
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Tags: CFTC, Congress, OTC, Swaps
Posted in OTC derivatives, Regulatory/actions | No Comments »
Wednesday, February 16th, 2011
Highly-respected media have given prominent lament about how central clearing of derivatives transactions could make those entities “too big to fail” and someday prompt a rescue by the U.S. Government. Really?
Let’s first consult history. During the recent financial crisis while the Troubled Asset Relief Program (TARP) was shoveling boatloads of billions into the financial community, the regulated clearinghouse needed exactly —$0— TARP dollars. An accident? Luck? Divine Intervention?
More history. Many decades ago we Humans noticed that we share many common dangers. Our lives, our health, our homes etc. were at risk. But, instead of saying “every man for himself,” we pooled the risk at modest cost to each of us, and the insurance industry was born.
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Tags: futures-style clearing, margin requirements, OTC, TARP
Posted in OTC derivatives | No Comments »
Wednesday, October 20th, 2010
The Futures Industry Association (FIA) hosted a panel on Oct. 18 to discuss the status of clearing in Chicago including a look at where we are going from here. Speakers included heads from the Options Clearing Corporation (OCC), CME Group and ICE Clear U.S. Of particular interest to each speaker was the Commodity Futures Trading Commission’s (CFTC) rules that were proposed that would limit the ownership a single entity could hold in a swaps clearinghouse. (more…)
Tags: CFTC, clearing, CME Group, Congress, Financial Regulatory Reform, ICE, OCC, OTC, regulation
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Wednesday, September 15th, 2010
The financial landscape has become an alphabet soup of regulators, exchanges and registration categories that range from APs to USD. With the passage of the Dodd-Frank bill we have seen even more added, including some that we don’t even know what they will do or what they will look like yet. Two that we are still figuring out are swap exchange facilities and security-based swap exchange facilities, aptly shortened to SEFs and SB SEFs. To be fair, there has been talk for years about moving swaps to exchanges and clearinghouses. Until Lehman Brothers’ collapse, though, that’s all it really was – talk. Now with a government mandate, the clock is ticking before SEFs are expected to be up and running.
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Tags: bailout, CFTC, Congress, economy, Financial Regulatory Reform, futures exchanges, Gary Gensler, OTC, regulation, SEC
Posted in Markets, Regulatory/actions | No Comments »
Tuesday, June 22nd, 2010
The over the counter (OTC) derivatives market has come under pressure in the aftermath of the economic meltdown and subsequent increased regulatory challenges. However, according to a new study by Aite Group, OTC asset classes are experiencing growth again, with growth in the credit default swaps (CDS) market outpacing other asset classes. According to the report, the drivers of this growth included a steady need for derivatives during the credit crisis and the development of central counterparties by exchanges to clear CDS. (more…)
Tags: CFTC, clearing, Financial Regulatory Reform, OTC, OTC regulation, SEC
Posted in Regulatory/actions | 1 Comment »
Friday, March 26th, 2010
I admit I had never seen new Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler speak before an audience. It isn’t because he’s been shy: since he joined the CFTC last year he has stormed through trading-related organization meetings giving speeches, reminiscent to Sherman’s army. And as the opening keynote at the Futures Industry Association’s (FIA) annual meeting in Boca Raton, Fla., Gensler did not disappoint.
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Tags: CFTC, Gary Gensler, OTC, regulation
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Monday, March 8th, 2010
When the proposed rule release hit the airwaves back in January, the shock was deafening. This would be the Commodity Futures Trading Commission’s (CFTC) proposal: Regulation of Off-Exchange Retail Foreign Exchange Transactions. The industry was well aware new regulations were in the works, it just wasn’t so sure of the details. And as they say, the devil’s in the details.
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Tags: CFTC, forex, OTC, regulation
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Friday, February 26th, 2010
Yesterday, we spoke with CFTC and Congress about how new regulation coming out of Washington would affect traders. We also sat down with former CFTC Chair Sharon Brown-Hruska, now a vice president in NERA’s securities and finance practice. Brown-Hruska says that while it’s justified for the CFTC to crack down on illegal forex operations, the agency’s current proposal to limit leverage in OTC forex to 10:1 “overshoots the mark.”
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Tags: CFTC, forex, OTC, regulation
Posted in Uncategorized | 3 Comments »
Thursday, February 25th, 2010
With regulatory reform in Washington THE issue affecting the futures industry right now, Futures magazine is in D.C. this week to talk with Congress and the CFTC about what’s ahead.
House Agriculture CommitteeChairman Collin Peterson (D-MN), whose Peterson-Frank Amendment to HR 4173, passed by the House in December, established a central clearing requirement for OTC derivatives, says, “the way our legislation is crafted right now, you will see a lot of [OTC products] standardized, 70%-80% of this stuff will be standardized.” He mentioned how the House Ag Committee is working with European regulators and that CFTC Chairman Gary Gensler is focused on coming out with harmonized international regulation.
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Tags: CFTC, Collin Peterson, forex, House Agriculture Committee, OTC, regulation
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