Latest articles from Staff

Europe tightens derivative definitions

BRUSSELS – The European Commission has written to the European Securities and Markets Authority (ESMA) to set out a broad definition of derivatives that includes foreign exchange (FX) forward contracts. This follows a letter from ESMA chair Steven Maijoor in February 2014 that requested clarification, after it appeared that the UK authorities were exempting FX forwards from the implementation of the European Market Infrastructure Regulation (EMIR).

EU consults on central depositories

PARIS – The European Securities and Markets Authority (ESMA) has published draft technical standards to improve securities settlement and central securities depositories (CSDs) in the EU. This consultation is the first step in implementing the central securities depositories regulation (CSDR) that was agreed between the European Council, European Parliament and European Commission in February.

FSB puts faith in fresh capital buffer

LONDON – The Financial Stability Board (FSB) is targeting the completion of its new capital buffer concept for the end of 2014, in a bid to tackle multiple challenges facing the post-crisis regulatory regime. Speaking at a press conference after an FSB plenary meeting in London in March, FSB chairman Mark Carney repeatedly referred to the importance of the group’s gone-concern loss-absorbing capital (GLAC) initiative.

New warning on collateral risks

LONDON – The European Repo Council (ERC) has warned that the financial system may not be able to channel high-quality collateral where it is needed in the post-crisis regulatory architecture. This comes in the context of growing demands for collateral, as banks have increased their dependence on secured funding such as repos. Moreover, regulators continue their drive for centrally cleared transactions with higher margin requirements.

India delays Basel III implementation

MUMBAI – The Reserve Bank of India (RBI) has added an extra year to the transitional period for local banks to meet Basel III capital requirements. The final implementation date is now March 31, 2019. At the same time, the central bank clarified guidelines on the loss-absorption features required in non-equity capital instruments such as subordinated debt. Such instruments must now have permanent rather than temporary write-down features to qualify as capital.

Liquidity rules challenge South African banks

CAPE TOWN – Daniel Mminele, deputy governor of the South African Reserve Bank (SARB), said the Basel net stable funding ratio (NSFR) still posed a challenge for local banks, even after revisions made in January 2014. Speaking at a conference in March, Mr Mminele argued that the NSFR essentially favoured retail funding with maturities in excess of one year.

Task force to create benchmark for fair value

The International Valuation Standards Council and the International Accounting Standards Board have set their sights on reducing widespread divergence in fair value reporting, finds Charles Piggott.

US states seek stronger role in global debate

State insurance regulators and legislators are pushing for greater representation on international bodies, says Philip Alexander.

Insurers press European Commission on solvency calibration

With the European Parliament preparing for elections after passing the Omnibus II package, insurers are lobbying the European Commission over draft delegated acts. Philip Alexander reports.

Email news service March 2014: Relief extended on US derivative rules

WASHINGTON, DC, March 24 – The Commodity Futures Trading Commission (CFTC) exemption for European derivative trading platforms to comply with key provisions of the Dodd-Frank Act has been extended to May 14, 2014. This relief, which applies to the rules covering swap executions facilities (SEFs), was originally due to expire on March 24, 2014.