The regulatory driven shift away from Ibors to alternative near risk free rates is happening surprisingly quickly, but could be even faster if various accounting and operational issues are addressed more swiftly
Financial Markets
EU recognises most of Japan’s uncleared OTC derivatives regime
Japan’s rules governing uncleared over-the-counter (OTC) derivatives have been recognised as equivalent to the European market infrastructure regulation (Emir) by the European Commission, though not its risk mitigation processes.
Hong Kong’s regulators consult on aligning OTC derivatives regime with global standards
Hong Kong’s regulators are consulting on a series of measures so that the city’s over-the-counter (OTC) derivatives regime closely aligns with international standards.
Lost face, lost money: Hong Kong’s empty IPOs
Hong Kong has suffered a series of scandals involving companies listing on its stock market misrepresenting their businesses triggering a series of share price plunges and trading suspensions. The regulator is now fighting back to protect Hong Kong’s reputation as a key global capital market
Critics pressure regulators to make MiFID II adjustments
Should the UK leave the EU, it could be a chance for EU-based exchanges to ditch open access rules around clearing and for firms to push for other changes in MiFID II and MiFIR
Two tested CCPs pass CFTC extreme reverse stress test
A reverse stress test on two central counterparty clearing houses (CCPs), CME Clearing and LCH Ltd, found that they have sufficient pre-funded resources to cover losses if all clearing members with losses defaulted under certain extreme one-day scenarios, the Commodity Futures Trading Commission (CFTC) said.
ARRC issues guidelines due to concerns over fall back language for reference rates
In its second report, the Alternative Reference Rates Committee (ARRC) said it has issued guidelines as it is concerned that most contracts referencing the London interbank offered rate (Libor) may not contain robust enough fall back language in the event the reference rate is no longer available.
Academic warns about potential ETF systemic risks
Exchange traded funds (ETFs) could exacerbate price swings during periods of market volatility and trigger a systemic event, warned an academic.
Transaction tax aimed at high frequency traders proposed
Europe is not the only place where there are calls for a financial transaction tax, with Peter DeFazio, a Democrat in the US House of Representatives, calling for one that specifically targets high frequency trading (HFT).
US and Singapore recognise each others’ derivatives trading venues
US and Singapore announced on March 13 that they have decided to grant mutual recognition regarding certain derivatives trading venues.
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