MarketVoice News
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Project KISS
On March 15, Chris Giancarlo, the acting chairman of the Commodity Futures Trading Commission, announced a three-pronged plan to renovate derivatives regulation that he called Project KISS, which stands for “keep it simple, stupid.”
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Rulebook Revamp
The Japan Securities Clearing Corporation has implemented several changes to its clearing rules for listed derivatives to enhance its clearing services and to introduce practices adopted by other major global clearinghouses. These include changes to the account structure—both omnibus accounts and individual segregated accounts will now be available for clients. In addition, the clearinghouse has revised its margining rules and its collateral management framework.
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Neither a Borrower Nor a Lender Be: On CCPs and Banks
A central counterparty, viewed from an economic perspective, is a “commitment mechanism.”
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OTC Derivatives Reform
On April 28, the Monetary Authority of Singapore issued a consultation paper to further implement OTC regulatory reform in Singapore.
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Cloud Over London
On May 4, the European Commission issued a policy statement discussing its plans to issue legislative proposals by the end of June to address “important and emerging challenges” in derivatives clearing.
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Leverage Ratio
On April 13, the Hong Kong Monetary Authority issued a consultation on the implementation of the Basel III leverage ratio framework in Hong Kong.
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OTC Clearing
On March 21, Hong Kong Exchanges and Clearing announced that it has launched a client clearing service ahead of the first phase of mandatory clearing in Hong Kong set for July 1.
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Shorter Settlement
On March 22, the Securities and Exchange Commission approved a rule that will shorten the standard settlement cycle for most securities transactions to T+2 from T+3. Broker-dealers will be required to comply with the shorter settlement cycle beginning on Sept. 5.
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Cyber Guidelines
The World Federation of Exchanges, which represents more than 200 exchanges, clearinghouses and other market infrastructure operators, published a set of cyber-resilience standards in April. The new standards, which are voluntary, are meant to ensure alignment and common minimum standards for trading venues around the world.
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Managing a Default: The Eurex Clearing Approach
Since the collapse of Lehman Brothers in 2008, policymakers’ and legislators’ focus on the topic of clearinghouse resilience, recovery and resolution has been intense, with many experts and commentators warning of yet more severe consequences for the financial system should a central counterparty ever have issues or even go into default.
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