The US Commodity Futures Trading Commission and the US Securities and Exchange Commission held their first-ever joint public meeting on October 22, where they jointly agreed on final rules that align minimum margin requirements for security futures. The meeting included opening public comments on the proposed margining of non-cleared swaps and security-based swaps.
Market participants say euro inflation swaps cleared at Eurex and LCH could see a significant basis after Eurex's first trade cleared at flat levels compared to LCH. The basis was expected to appear as participants move more of their trades to Frankfurt as part of their Brexit contingency plans.
Brexit and the weakening of the UK's ties to the EU are significant setbacks for London as a global financial center, but should not be catastrophic, market participants say. Much of the relationship between London and the EU will be determined only after the temporary extensions to existing arrangements have ended, says Simon Gleeson of law firm Clifford Chance.
Officials from financial authorities in the US and the UK met this week as part of an effort to expand regulatory cooperation and promote greater activity between the two markets. "Participants will continue to engage bilaterally on these topics, as well as other topics of mutual interest ahead of the next Working Group meeting, which is expected to take place in the first half of 2021," the group said in a statement.
The Australian Securities and Investments Commission says it will publish "relatively soon" a paper establishing market participants' conduct obligations during the Libor transition. The guidance aims to identify and mitigate conduct risks, and covers the treatment of clients and products based on alternative risk-free rates.
Four new whitepapers published by the International Swaps and Derivatives Association, R3 and four legal firms explore the potential legal issues surrounding the use of derivatives contracts documented on a distributed ledger technology platform. The papers consider these issues from a French, Irish, Japanese and New York law perspective
India's International Financial Services Centers Authority has established a framework to allow a new regulatory sandbox for firms to test their fintech innovations live in Gift City, with the aim of establishing a fintech hub. "All entities operating in the capital market, banking, insurance and pension sectors as well as individuals and startups from India and FATF-compliant jurisdictions, shall be eligible for participation," notes the IFSCA.
The Federal Reserve next month will release guidance on how banks need to demonstrate that they can maintain critical business operations while weathering the risks of severe disruptions. Fed deputy director Arthur Lindo told a conference that "available evidence indicates there are significant benefits of making use of frameworks already in place rather than introducing a new set of prescriptive requirements."
IIA President and CEO Richard Chambers discusses the recent suspicious deaths of four public-sector internal auditors in Liberia. Chambers formally wrote to US Secretary of State Mike Pompeo, urging the US' full support in uncovering the truth behind these deaths. "It is critical for these suspicious deaths to be thoroughly investigated, and that findings be made publicly available by Liberian authorities," Chambers writes in a blog post.
Heath Tarbert, chairman of the Commodity Futures Trading Commission, told an industry conference that the leadership of the Alternative Reference Rates Committee and other coordinated efforts between authorities and market participants have been crucial in managing the transition away from Libor.