On Dec. 11, the Securities and Exchange Commission voted by a 3-1 margin to issue a proposed rule limiting how much investment companies such as mutual funds and exchange-traded funds can invest in derivatives such as futures, forwards and swaps. The proposed rule also contains a number of requirements aimed at addressing the risks of holding derivatives in investment portfolios.
CONTINUE READINGKorea Exchange is seeking to enhance its appeal to international market participants by introducing several changes to its trading rules and technological infrastructure. For example, the exchange is working with the Korean government to allow foreign investors to use omnibus accounts.
CONTINUE READINGTrading Shanghai versus London in the copper market? Sucden Financial wants to help. The London-based broker has added a spread trading functionality to its Star trading platform for futures and options, which was developed in-house. The company said its dynamic spreader tool will make arbitrage in commodity futures markets easier to execute by allowing users to create and trade synthetic spreads within a single exchange or across exchanges. For example, traders can trade the premium between raw and refined sugar on Intercontinental Exchange by simultaneously buying sugar No. 11 futures and selling white sugar futures. To mitigate legging risk, the spreader releases orders in clip sizes that can be set by the trader.
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CONTINUE READINGDeutsche Boerse and Markit are stepping up their investments in the financial technology sector via a fund established by Illuminate Financial Management, a London-based venture capital fund focused on early-stage fundraising for financial technology companies.
CONTINUE READINGSmall and mid-sized banks now have an electronic marketplace to lend and borrow short-term funds. Launched in December, the American Financial Exchange will focus on serving the overnight and 30-day borrowing needs of 1,740 community and regional banks in the U.S. This represents institutions that manage between $500 million and $125 billion in assets in a total market of nearly $5 trillion.
CONTINUE READINGGreat networking at the opening reception at the 11th Annual FIA Asia Derivatives conference.
CONTINUE READINGEfforts are underway in Europe and the U.S. to strengthen industry protections against attacks on computer systems. Regulators in both regions are developing new standards for exchanges and clearinghouses, which are seen as critical to the operational security of financial markets.
CONTINUE READINGEurex Clearing in November launched its Prisma Margin Estimator, a free service that allows clearing members and their clients to estimate initial margins for futures, options and swaps. The service was designed in collaboration with OpenGamma, an open source risk systems developer, and will run in parallel with the clearinghouse's existing margin calculator.
CONTINUE READINGMaureen Downs of Rosenthal Collins, Kevin McClear of Intercontinental Exchange and John McPartland of the Federal Reserve Bank of Chicago discuss issues impacting the clearing model during the market structure panel.
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