MarketVoice News
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Moral Hazard
The European System of Central Banks issued a statement on Aug. 25 expressing opposition to any change in EU regulations that would give central counterparties an automatic right of access to central bank liquidity. The statement emphasized that the current legal framework allows each central bank to determine for itself which facilities it wishes to offer to CCPs and defines the conditions for such access. An automatic right to central bank liquidity “would create moral hazard on an extraordinary scale,” the ESCB warned. The statement was issued in response to a European Commission consultation on possible changes to EMIR.
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Preparing for Remit
On Sept. 24, FIA issued a notice summarizing the registration and reporting requirements of the EU Regulation on Wholesale Energy Markets Integrity and Transparency (REMIT). FIA drafted the notice to help clearing firms inform customers who may have to comply with the new reporting obligation, which enters into force on Oct. 7 for certain exchange-traded wholesale energy products and on April 7 for certain over-the-counter energy products. Those products include futures, options and swaps based on electricity or natural gas for delivery in the European Union as well as contracts relating to the transportation of electricity or natural gas in the EU.
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Resources for Regulators
On Sept. 17, the International Organization of Securities Commissions published the final report of a task force it set up in 2013 to address the challenges of cross-border regulation.
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Capital Efficiency
Singapore Exchange is seeking feedback on proposed rules that would ease the capital requirements for banks that are affiliated with SGX clearing members.
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Clearinghouse Standards
On Sept. 22, four high-level groups of international banking and market regulators released a progress report on their efforts to enhance the resilience, recovery planning and resolvability of central counterparties.
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Cybersecurity: NFA Sets Standards
The National Futures Association, the U.S. futures industry’s self-regulatory organization, has drafted standards that all NFA members will need to apply in protecting themselves from the risk of unauthorized access or attacks on their information systems.
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Exchange Connectivity
Options, London-based provider of high-speed exchange connectivity, announced on Sept. 17 that it has added three more European exchanges to its colocation platform, Velocity. With the addition of Nasdaq’s Scandinavian exchange, Switzerland’s SWX and Austria’s Wiener Borse, the platform now covers seven derivatives markets, 14 equity exchanges and two commodity markets in Europe.
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Owner vs. Member
The Securities and Exchange Commission on Sept. 10 issued an order lifting a stay of approval on the OCC’s plan to raise additional capital and a second order initiating a review of the approval.
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Enforcement
In September, the Commodity Futures Trading Commission took two separate enforcement actions for violations of its wash trade rules.
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Electronic Voice
Green Key Technologies, a two-year old company that specializes in voice-activated software for traders, won a big endorsement in September.
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