ISDA comments on SDP role in the new regulated world

ISDA have released a response to the FSB progress report published on April 15. While the response covers regulatory arbitrage, execution, clearing and reporting, the most interesting statement is their view of how SDPs can and should function within the new regulations.

In the section “Organised trading of derivatives”, the following comment is made: Continue reading

Dodd-Frank: Where have we got to so far?

As part of our review & assessment of Dodd-Frank, I thought it would be useful to summarise progress to date & try to draw some conclusions about the speed & direction of the implementation.
Continue reading

FX Clearing continues to be discussed (by academics!)

Bloomberg ran an article of a phone interview with Darrell Duffie, Stanford University Professor of Finance, who suggested that the risk of investor default in FX swaps and Forwards was large enough to justify post trade clearing through clearinghouses.

Continue reading

What can OTC Derivatives learn from Silvers crash last week?

A key objective of Dodd Frank has been to put in place regulations for the OTC derivatives markets, that will reduce systemic risk in the financial system. The mandatory use of Central Counterparty Clearing (CCP) for cleared products is key to that strategy.

Continue reading

FXAll to register as SEF – my thoughts

Yesterday I blogged about how banks should be doing more to ‘future proof’ their single dealer platforms, by providing tools and services that would enable clients to continue dealing on SDPs with greater confidence, whilst complying with the evolving regulatory landscape.

I touched on the idea that bank SDPs should consider providing routing capabilities for client requests through to SEFs for products such as NDFs and FX Options if required: Continue reading

EuroMoney 2011 FX Poll – some thoughts

SDP volumes continue to outstrip MDP volumes:

An interesting comment caught my eye in the EuroMoney 2011 FX poll that customers preferences are changing, and that whilst single dealer platform (SDP) volumes still exceeds multi dealer platform (MDP) volume, the gap is closing, and clients are starting to migrate to MDPs.

Still seems a decent gap to me! Continue reading

Dodd-Frank implementation delayed (again)?

Just saw a headline from the Washington Post here about the House Agriculture Committee approving legislation that would result in an 18 month delay to the implementation of derivative rules by the CFTC. Continue reading

EuroMoney 2011 FX Poll results out!

EuroMoney 2011 FX polls results released.

Site very busy at moment, and may not respond.

Analysis to follow later, but here are the key headlines: Continue reading

Will NDFs be required to trade on SEFs under Dodd Frank?

What will happen with NDFs?

As I mentioned in my last post, non-deliverable forwards (NDFs) will be subject to Dodd Frank regulations here. This means, they will be subject to central clearing, and trade reporting. But, that being the case, the question is:

Will NDFs also be required to trade on SEFs? Continue reading

FX Swaps & Fwds EXEMPT from Dodd Frank – OFFICIAL!

At last!

US Treasury Secretary has finally determined that FX Swaps and FX Forwards should be exempt from the definition of Swaps under Dodd Frank. (full details here or here)

SEF Trading & Central Clearing (Exempt): FX Swaps and FX Fwds will NOT be required to trade on SEFs, or be centrally cleared.

Trade Reporting (Required): FX Swaps and FX Fwds will remain subject to reporting requirements according to the CFTC (see earlier post here)

Other FX derivatives subject to Clearing & Exchange Requirements: FX Options, Currency Swaps and Non Deliverable Forwards (NDFs) are not exempt from Dodd Frank, as they do not satisfy the statutory definition of an FX Swap of FX Forward.

As usual, the Streetwise Professor has a good analysis of the determination, worth reading here

Other coverage includes:

WSJ here

FT here