OTC derivatives
Extent of Sef-driven fragmentation revealed in Isda survey
Almost 80% of respondents indicate that Footnote 88, which required all platforms to register as Sefs by October 2, has resulted in fragmentation of liquidity in FX options and NDFs
StanChart looks to eclipse rivals in OTC derivatives
New 'Eclipse' business under Andrew Sterry and Luke Brereton will focus on execution, clearing, liquidity and portfolio services in over-the-counter derivatives
BIS: FX OTC markets hold steady, despite regulatory uncertainty
Semi-annual BIS survey reveals a rise in FX OTC derivatives transactions in the second half of last year
Standardised OTC swaps spice up futurisation fight
March saw the launch of a template for a new standardised interest rate swap product – an attempt to protect swap market liquidity from the threat of futurisation. The first product based on the template could be launched within weeks, but even some…
Futures will not beat swaps on margin alone, say buy-side firms
Swap futures have a number of advantages, but OTC instruments will continue to be popular, leading buy-side firms say
Tarns gain favour as investors seek to exploit range-bound pairs
Target accrual redemption notes have regained some popularity after losing favour during the crisis, but investors are keeping a firmer eye on the risks, say dealers
Complexity and costs of clearing continue to cause concern
Mandatory clearing of OTC derivatives could lead buy-side firms to leave a greater portion of their risks unhedged, warn speakers at a buy-side conference in London
CFTC's Gensler defends swaps vs futures margin disparity
Forthcoming Sef rules will not address margin concerns raised by Bloomberg
Banks claim €300 billion hole in margin study
Banks call for Basel Committee and Iosco to re-run study on impact of uncleared margin rules after errors emerge
Collaboration needed on FX options clearing
Introducing central clearing into the foreign exchange market under new regulations has proven a thorny process, particularly for FX options. The priority for market participants should be to agree on appropriate processes for pricing, valuation and…
New rules designed to kill OTC market, says European regulator
Central Bank of Ireland adviser says reforms will cause an "Ice Age" in the derivatives market
No need to panic about collateral supply, says Bank of England
Isda estimates that mandatory clearing and margin could require the posting of up to $30 trillion of initial margin have been inflated, not least because of a likely exemption for FX swaps and forwards, according to a senior BoE official
Gazprom Marketing & Trading: Powering up for clearing
Gazprom's UK-based trading subsidiary is hoping not to be hit by a clearing requirement - but has been doing its sums just in case, the company's treasurer, Michael Kawski, tells Lukas Becker
Offshore deliverable renminbi derivatives market grows despite fall in trade volumes
Despite a fall in offshore renminbi trade volumes, dealers say corporates are making increasing use of CNH forwards and options markets to hedge price exposure. Joti Mangat investigates
CME’s new swap future uses Goldman Sachs patent
Licensing agreement could be worth up to 20% of revenues from patented contract, and is seen as an attempt by Goldman Sachs to hedge its bets as new rules threaten OTC market profits
European OTC clearing documentation faces delay
Complications over close-out mechanisms and segregation models will delay the European addendum by up to three months, say dealers
Relief for dealers as Basel reins in capital for cleared trades
Basel Committee addresses long-standing complaints over default fund exposures and client clearing
Swift to roll out structured messages for bilateral trade netting
Industry messaging provider aims to streamline netting of non-CLS currencies
Diverse netting approaches create OTC headache
A lack of legal statutes over netting in several Asian countries means OTC trades could become prohibitively expensive in a post-Basel III world, potentially pushing international banks out of some markets in the region
WGMR margin rules borrow heavily from US proposals
Working group publishes proposed margin rules for uncleared trades – bringing global rules in line with an earlier US proposal
Prices diverge as CVA exemption remains in limbo
Dealers face pricing headache as they wait to see whether Europe's version of Basel III will exempt corporate customers from the CVA capital charge
Global FX division moves forward on options clearing
The data-collection stage of a major project to enable clearing of forex options is close to completion, according to the GFMA's Mandy Lam
Spotlight on: Mandy Lam, global FX division
The managing director for North America of the Global Financial Markets Association’s global FX division talks to Melanie White about the key regulatory challenges facing the FX market and FX options clearing and settlement project, which she is heading…
Dealers pitch loan format for swaps as CVA dodge
Banks are offering to replicate the economics of OTC swaps in loan format - avoiding new capital and clearing rules