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CFTC’S Massad Discusses Clearinghouse Risk in Keynote Address at Boca
Clearinghouse risk and in particular the financial resources available in the event of a default is a top priority for the Commodity Futures Trading Commission, said the agency’s chairman Timothy Massad in his keynote address to FIA Boca delegates on March 11.
CONTINUE READINGThe Geography of Innovation
Fintech startups are springing up all over the world, but certain locations are emerging as the centers for developing next-gen technologies in capital markets. What are the key ingredients of a successful fintech ecosystem? Daniel Gorfine, the chief innovation officer of the Commodity Futures Trading Commission, gave opening remarks on the next phase of LabCFTC and the agency's transformation into a 21st century regulator. Then a panel of experts from fintech incubators, venture capital investors and public sector entities debated the pros and cons of the leading fintech hubs in Europe and the U.S. and shared their views on the boom in fintech startups.
CONTINUE READINGFIA questions OCC's proposed recovery tools
On Jan. 16, FIA submitted a letter to the Securities and Exchange Commission commenting on a proposal by the Options Clearing Corporation to amend certain provisions of its default management rules. The amendments pertain to tools intended to address liquidity shortfalls and credit losses following a clearing member default. FIA raised questions about several areas of the proposal. In particular FIA questioned OCC's approach to clearing fund replenishment, and said OCC should explain its approach for determining the amount of funding that clearing firms would be required to contribute to help cover default-related losses. FIA also questioned OCC's approach to "partial tear-ups" under which some contracts would be terminated. FIA expressed concerns with certain specific details of the partial tear-up process and opposed a provision that would reallocate losses from a tear-up to all members of the clearinghouse regardless of whether they were involved in the transactions being terminated.
CONTINUE READINGFIA co-signs letter on equivalence of trading venues under EMIR UK and MiFIR UK’
On 5 April, FIA co-signed a letter to HM Treasury and FCA regarding the equivalence of EEA trading venues. Signing the letter alongside FIA were ISDA (International Swaps and Derivatives Association), AFME (Association for Financial Markets in Europe), AIMA (Alternative Investment Management Association), Assosim (Association for Financial Market Intermediaries), EFET (European Federation of Energy Traders), ICI-Global (Investment Company Institute), SIFMA AMG (Securities Industry and Financial Markets Association Asset Management Group) and UK Finance
CONTINUE READINGCFTC's Berkovitz expresses optimism over agency's agenda
Recently confirmed Commissioner Dan Berkovitz expressed optimism that the Commodity Futures Trading Commission will forge ahead on a "timely" agenda of issues in a bipartisan way.
CONTINUE READINGIndustry experts expect digital asset derivatives will focus on bitcoin for now
The marketplace for derivatives backed by digital assets is changing rapidly. But depending on who you ask, that pace of change could either be too fast—or not fast enough.
CONTINUE READINGDeconstructing a Default
To some outside observers, it may seem like a distant memory that a member of Nasdaq’s Nordic clearinghouse defaulted in September. But the event remains fresh in the minds of many derivatives market participants, and a hot topic of conversation in the industry.
CONTINUE READINGMarket participants optimistic about the opening of Chinese derivatives markets
In 2018, China has taken great strides towards globalizing its derivatives markets. Yuan-denominated crude oil futures contracts began trading internationally in March, followed by iron ore contracts that began trading internationally in May. And most recently, the China Securities Regulatory Commission granted UBS Group permission for a majority stake in its Beijing-based subsidiary in December — making it the first foreign bank to formally control a Chinese securities firm.
CONTINUE READINGHow regulatory coordination can fight market fragmentation
The cleared derivatives industry currently faces a dichotomy of increasingly interconnected global markets but increasingly localized regulation.
CONTINUE READINGCCPs and clearing members agree: There are no easy answers
When it comes to clearinghouse risk issues, the cleared derivatives community is united in agreement on the importance of protecting CCPs -- from the clearinghouses themselves to brokers, commodity trading firms and member clearing firms.
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