REGULATION
Swap dealers failing to post margin with custodians have
been granted an extension period by the US Commodity
Futures Trading Commissions (CFTC).
The extension has reportedly been put down to
custodian hold-ups with a lack of custodial accounts
for banks to post initial margin for their uncleared
derivatives.
Deutsche Bank has been charged by the US derivatives
watchdog, for failing to report swap data for multiple asset
classes for five days.
The CFTC found that a system outage prevented the bank
from submitting the reports, stating, “subsequent efforts
to end the system outage repeatedly exacerbated existing
reporting problems.”
Banks could pull out of listed options markets in the wake of
higher capital rules, the Options Clearing Corporation (OCC)
has warned.
The Basel III capital rules, or the supplementary leverage
ratio (SLR) rules in the US, have caused a number of banks
to re-evaluate their derivatives options due to higher balance
sheet costs, with many pulling out of certain markets.
POST-TRADE
Cobalt DL has entered into
its beta testing phase with
the backing of eight foreign
exchange (FX) institutions,
amid an investment from
First Derivatives.
Fin Tech specialist
First Derivatives has also
agreed to supply the
blockchain initiative with
with its big data solution ‘Kx
technology’.
Reporting requirements
under regulations like MiFID
II are driving the buy-side to
outsource data functions to
manage the complexity of
complying with the rules.
The explosion of data
handled by asset managers
for reporting to regulators,
stakeholders and clients, is
so complex that buy-side
institutions are increasingly
seeking to outsource data
operations.
The digitalisation of post-
trade operations is crucial to
achieve maximum efficiency
and control costs, according
to an analysis by Deutsche
Boerse and consultancy
firm Celent.
As the systems and
environment supporting
the European post-
trade framework remain
fragmented, 80% of OTC
derivatives reconciliations
are manually processed
over the telephone or are
Excel based.
BUY-SIDE
BREXIT CONCERNS
A split in regulation
following the EU
referendum result in
the UK has been raised
as the biggest concern
amongst the buy-side.
A poll of 322 market
participants from
around the world
authored by TABB
Group, found 64% of
the buy-side community
consider regulatory
bifurcation as the
potential impact that
concerns them most.
COMPRESSION
David Hill, Aberdeen
Asset Management’s
former COO of fixed
income, has launched an
OTC derivatives portfolio
compression service for
the buy-side.
Speaking to The Trade
Derivatives, Hill says
around nine of the top 15
tier one banks are signed
up to the service, called
ClearCompress, and is
now being extended to
clearing clients.
Deutsche Boerse
