Singapore’s MAS recently published a consultation on the mandatory clearing by banks in Singapore of vanilla interest rate swaps, to be introduced in mid 2016. Here is a brief analysis of their consultation. Their proposals are not controversial and will mostly affect the professional market who are very likely to be able to clear these contracts today. The consultation also structures the rules to avoid any potential cross-border conflict with other regimes. Interestingly they see a clear scope difference from their reporting requirement showing that market supervision and the management of systematic risk may naturally have different solutions.
Updated EU technical consultation for margin on uncleared OTC derivatives
ESMA, EBA and EIOPA have updated their consultation on the detailed rules for the introduction of initial and variation margin for uncleared OTC derivatives. The most significant change is that their restriction on a single issuer making up more than 50% of the collateral supplied will now only apply to G-SIIs, O-SIIs and where the value of the collateral exceeds €1 billion. Here is a short paper describing the changes.
Margin for uncleared OTC derivatives
In response to industry pressure BIS/ IOSCO with the major regulators have agreed to delay the implementation of initial and variation margin for uncleared OTC derivatives. The first phase will now come into effect in 2016 and the whole process will be live by the end of 2020. Here is a short paper describing the rules and the revised dates.
Expansion of Hong Kong’s OTC Derivative Reporting and Record Keeping
The HKMA implemented a limited form of OTC derivative trade reporting a few years ago. Now expanded regulations have been finalised and published. Broker dealers and money brokers will now join banks in reporting trades dealt or arranged in Hong Kong. Here is a short article explaining their impact.
The scope of MiFID II and MiFIR
One of the flaws in MiFID I was that it missed out some of the newer fast growing markets like ETFs. MiFID II corrects this by covering nearly everything but grasping which products are covered by which parts is not simple. Here is a diagram that shows what is under which parts of the regime.
Welcome
Welcome to Greg Stevens’ site dedicated to explaining how to control OTC derivatives and the new financial regulations which aim to also reduce their risk to the global economy.