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CFTC confirms Libor Relief

At the request of the ARRC, the CFTC has today announced comprehensive relief to swap dealers and other market participants as they make the transition from swaps that reference LIBOR and other “Impaired Reference Rates” to those that reference alternative benchmarks. The relief comprises no-action letters from each of the Commission’s main divisions, broadly covering […]

Another week, another regulator falls in line

The latest IM deadline passed at the start of this month without fanfare, and larger firms were able to breathe their fourth sigh of relief. A year from now, the challenge will not be as “easy”. In Phase 4, approximately 35 firms fell in-scope of the €750 bn threshold. Updated numbers for Phase 5 show […]

The Volcker strip – making banking less regulated again

US regulators have disclosed the much awaited revision of the Volcker Rule that had been taken on by the Trump administration. Wall Street has undoubtedly received a huge win, but who is likely to bear the losses? The Volcker Rule was implemented after the financial crash to stop banks from engaging in proprietary trading (buying […]

HKMA latest IM domino to fall

Earlier today, the Hong Kong Monetary Authority announced their intention to adopt the BCBS/IOSCO’s revised implementation schedule. Their updated deadlines are as follows: For target institutions with Non-Cleared OTC derivatives of more than HKD 375 billion the date will be 1 September 2020. For target institutions with Non-Cleared OTC derivatives of more than HKD 60 […]

Singapore and Korea join rush to delay IM

The Korean Regulator, FSS, is the latest regulator to announce that they will adopt the BCBS/IOSCO guidelines for mitigating risk for non-cleared OTC contracts. This decision follows a recent publication by the MAS (Singapore’s regulatory authority) where they stated that they would also use BCBS/IOSCO’s framework for Non-Centrally Cleared Derivatives in determining whether margin requirements […]

IM Phase 5 to bifurcate

Confirming recent market rumours, BCBS\IOSCO have today announced their recommendation to stagger IM Phase 5 implementation over a two year period. An adjusted Phase 5 will apply to firms with an AANA equal to or greater than USD\EUR 50bn and less than 750bn. A new Phase 6, from 1 September 2020 to 1 September 2021, […]

Phase 5 mitigation mitigated

Trailing in the wake of their northern neighbours, the CFTC has today issued a Staff Advisory confirming that there is no requirement for covered swap entities (CSEs) to put IM documentation and custody arrangements in place before the $50m threshold is reached.  As the conclusion to the Advisory notes: “Accordingly, to the extent the $50 […]

CFTC nod and a wink for IM phase 5 depopulation

The CFTC’s Office of the Chief Economist (OCE) has responded to industry petitions to mitigate the widely-forecasted IM Phase 5 oncoming storm. Readers will recall the July 2018 ISDA/SIFMA white paper previewing the phase 5 population explosion and recommending various reduction strategies: Raising the in-scope AANA threshold from $8bn. to $100bn. Postponing mandatory compliance until […]

CFTC to simplify segregation

July 24th saw a unanimous approval of the CFTC’s proposal to reduce the complexity surrounding segregation of assets held as collateral in uncleared swap transactions. Under the Dodd-Frank, a swap dealer was required to notify each counterparty that they (the counterparty) possessed the right to choose whether to keep their funds in a segregated account […]

US to EU- the honeymoon is over

Although prefaced by the usual caveat that “the views contained in this speech are my own and do not represent the views of the CFTC”, Commissioner Brian Quintenz delivered the keynote address yesterday at the FIA Annual Meeting, eviscerating the EU’s plans to revise EMIR in respect of CCP oversight. The short speech is well-worth reading in full, […]

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