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FIA Europe: U.S., EU want to mitigate Basel III capital rules' effect | ICE may offer options on credit default swaps indices | Proposal for yuan-futures trading in Shanghai free-trade zone is nixed

May 13, 2015

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FIA Europe: U.S., EU want to mitigate Basel III capital rules' effect
The clearing industry would benefit if regulators in the U.S. and Europe make amendments to Basel III rules on bank capital to account for segregated margin, FIA Europe said. Markets regulators need to collaborate with banking regulators to avoid further harm to the clearing industry, said Simon Puleston Jones, FIA Europe's CEO. FOW magazine online (subscription required) (5/12)

ICE may offer options on credit default swaps indices
A proposal by Intercontinental Exchange to roll out options tied to credit default swaps indices is being questioned by critics who say the products are not liquid enough. Financial Times (tiered subscription model) (5/12)

Regulatory Roundup

Proposal for yuan-futures trading in Shanghai free-trade zone is nixed
Chinese regulators have turned down China Financial Futures Exchange's proposal to offer renminbi-U.S. dollar futures in the Shanghai free-trade zone. A nationwide contract, however, is expected be offered on the mainland once the currency is fully convertible, sources said. Risk.net (subscription required) (5/13)

Regulatory changes are raising concerns among clearing brokers
The supplementary leverage ratio and other regulatory changes are creating risks for clearing firms, brokers said at an industry event. The ratio is gaining a great deal of attention, but the industry is likely to "come out to an OK place," said Silas Findley of Citigroup. FOW magazine online (subscription required) (5/12)

CFTC clarifies forward contracts with embedded volumetric optionality
The Commodity Futures Trading Commission has provided a final interpretation of forward contracts with embedded volumetric optionality, which involve different delivery amounts in an underlying commodity. The regulator said in November that it would offer clarification of when such contracts would be deemed forward contracts. Reuters (5/12)

Gallagher to step down from SEC
Daniel Gallagher, a Republican member of the Securities and Exchange Commission, plans to resign but will remain until a successor has been confirmed. The White House has candidates to replace Gallagher and departing Democratic member Luis Aguilar. Bloomberg (5/12)

Analysis: Regulators have power to end "too big to fail"
Financial regulators have all the tools they need to end the problem of banks that are "too big to fail," Federal Deposit Insurance Corp. Chairman Martin Gruenberg said. The question that remains is whether they have the regulatory and political will to use them, writes David Reilly. The Wall Street Journal (tiered subscription model) (5/12)

Industry Developments

Taiwan regulator is encouraging creation of RMB futures marketplace
A supply of renminbi provides Taiwan with the opportunity to develop financial products based on the currency, Tseng Ming-Chung, chairman of China's Financial Supervisory Commission, said at a seminar hosted by FIA Asia, Taiwan Futures Exchange and Eurex. The agency is backing Taiwan Futures Exchange's potential creation of an RMB futures marketplace that involves international participants, he said. AutomatedTrader.net (5/12)

TMX to make better use of data to boost competitiveness, CEO says
Canada-based exchange operator TMX Group is aiming to improve how its units are integrated and how it harnesses data in an effort to counter competitive challenges, CEO Lou Eccelston said. The company on Monday reported that first-quarter profit was down 8%. Reuters (5/12)

BM&FBovespa buys stake in Chilean exchange
Reuters (5/12)
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REDI platform is updated with access to Quantitative Brokers algorithms
The Trade News (U.K.) (tiered subscription model) (5/12)
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Commodities and Managed Futures

Zinc's price recovery is meeting with growing investor demand
Commodities investors are developing a strong appetite for zinc as a potential supply shortage looms. Zinc's price on the London Metal Exchange is up 7% this year. Financial Times (tiered subscription model) (5/12)

Glencore is fighting environmental, labor accusations in Colombia
MarketWatch (5/12)
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FIA News

FIA Market Technology Division Webinar: Leap Second Event Preparedness
FIA Market Technology Division Webinar: Leap Second Event Preparedness The FIA Market Technology Division will host a webinar on Thursday at 11 a.m. EST/10 a.m. Central to discuss the upcoming June 30 "Leap-Second" event. The June 30 Leap Second event will be the first time that a leap-second event has occurred during active trading hours in an environment where electronic and automated trading relies on sub-second precision for communication, execution, clearing, surveillance and audit trails. The webinar will provide information about the details of the event, the proposed solutions being offered by exchanges and other industry bodies, as well as a list of recommendations for the industry. Register here.

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