Move Away from LIBOR Would Hurt Banks

Despite industry groups’ efforts to prevent a move away from LIBOR as a benchmark rate for derivatives transactions, global regulators appear increasingly likely to do just that, people with knowledge of the matter say. With many banks already having switched to overnight-indexed-swap rates for valuing...

Mini Flash Crash Hits NYSE

A number of U.S. stocks saw violent swings Wednesday, as trading firm Knight Capital Group acknowledged technical glitches in its market-making unit that affected the functionality of its automated trading systems. In an echo of the 2010 Flash Crash, the technical issue impacted 150 New York Stock...

Compliance Date for Swaps Rules Expected October 1

According to people with knowledge of the matter, the Commodity Futures Trading Commission (CFTC) is expected to publish its recently finalized rule defining swaps on August 2. Because the rule defines the compliance date as falling 60 days after the publication date, market participants will be required to...

EC May Limit Exposure to High Risk Derivatives

As part of a European Commission review of its Undertakings for Collective Investment in Transferable Securities (UCITS) initiative, The EC is considering curbing the use of so-called non-eligible assets, derivatives instruments that may aggregate excessive levels of hidden risk. The commission is reportedly...

CFTC Wants Direct Access to Customer Accounts

CFTC Chairman Gary Gensler announced Wednesday that the agency will seek to have direct electronic access to all bank and electronic accounts holding customer funds. The remarks, made at a hearing of the U.S. House Committee on Agriculture, signal the CFTC’s aggressive approach to dealing with the fallout...

CFTC Closer to Requiring Central Clearing for Swaps

The CFTC  proposed a new rule on Tuesday that would require central clearing within a specified period after the agency designates a swap category for clearing. Large swap traders will have 90 days to comply, private funds and commodity pools will have 180 days, and all other firms will have 270 days to...

CFTC Names Interim LEI Provider

The CFTC has announced that DTCC-SWIFT will provide CFTC Interim Compliant Identifiers (CICI), the first step in a process that will eventually lead to a permanent global legal identity identifier (LEI) system. By enabling swap market participants to easily identify their counterparties when reporting swap...

NFA to Review Segregated Funds Audit Process

In the wake of scandals at MF Global and Peregrine Financial Group (PFG) involving the losses of large amounts of customer segregated funds, the National Futures Association (NFA) has announced that it will review how it audits the way FCMs treat such funds. Coming months after a similar chain of events at...

Compliance Teams Struggle to Meet Deadlines

As the finalization of 11 major Dodd-Frank rules approaches in October, swap dealer compliance teams are beginning to wonder how US regulators will handle missed compliance dates. The US Commodity Futures Trading Commission (“CFTC”) may choose not to sanction firms for failing to comply with the rules by...

CFTC Chairman Gary Gensler Called On to Resign

Senator Jerry Moran, a Kansas Republican, called for the resignation of Gary Gensler, Chairman of the CFTC. In light of the recent collapse of MF Global and PFGBest, Moran accused Gensler and the CFTC of being “asleep at the switch” during the crisis, stating “[m]aybe Gary Gensler needs to...