Latest Blog Posts

The RRP Challenge: How far have you progressed?

Bernd Richter, Capco

Jun 13, 2013

Recovery and resolution planning (RRP) - yet more valuable resource diverted to compliance? Or can it be a source of deep structural understanding and competitive differentiation? To date, some 39 separate financial institutions have been the subject of EBA stipulations to comply and provide an RRP by the end of the year. With first deadlines looming, institutions must ask searching questions and overcome challenges in the following key areas: Certainty: Defining and creating the RRP Preparation: Getting ready for smooth and predictable implementation (should this ever prove necessary) Reality-alignment: Realising this is ‘more than documentation’ Future-proofing: Adopting an approach capable of being updated as circumstances change and, crucially, one that defines a structure optimised to avoid any actual implementation in the future Strategic and commercial awareness: Leveraging all the opportunities, making RRP preparation a source of real competitive advantage as well as compliance Financial institutions must now look at RRP implications and preparations. read more

Uncertainty abides amidst a flurry of CFTC activity

Mark Brennan, Fidessa

Jun 12, 2013

It’s a busy – not to mention dramatic and uncertain – time for U.S. derivatives regulation. Consider the milestone of final SEF rules and yesterday’s “Category 2″ clearing deadline. Consider, too, the on-going uncertainty as to the pending expiration of the exemptive relief on Dodd-Frank’s cross border rules (also known as ‘extra-territoriality, or ‘ET’). CFTC Chairman Gensler remains a strong advocate for ET, despite the fact that three of the five commissioners wish to extend the deferral. read more

Half a job

Christian Voigt, Fidessa

Jun 10, 2013

MiFID, the mother of all European financial regulation, rumbles on and on. The European Commission’s MiFID II consultation in 2011, the Ferber Report in March 2012, and the European Parliament vote in October 2012 were all highly anticipated and widely reported on. But despite the fact that the Council of Ministers has published more than 20 different drafts during the Cyprus and Ireland presidencies alone, it’s still unlikely that we’ll see a final text before the handover to Lithuania at the end of this month. read more

Is SEF Aggregation the Next Big Thing?

Daniel Parker, SunGard

Jun 07, 2013

A significant event occurred on May 16, 2013. The U.S. Commodities Futures Trading Commission (CFTC) voted to allow swap execution facilities (SEFs) to unilaterally determine the “made available to trade” (MAT) criteria; which effectively determines which swaps are required to be cleared. This simply means that SEFs, as well as their post-trade service providers, will substantively influence the course of performance for the global swaps marketplace. The general rule is that all swap transactions that are subject to the trade execution mandate must be executed on a designated contract market (DCM) or a SEF. read more

All set for a clear summer

Steve Grob, Fidessa

Jun 04, 2013

There was an interesting footnote to the FT article on NYSE Euronext’s final shareholders’ approval of the ICE deal yesterday. It talked about how ICE Clear will be taking over clearing for Liffe as of 1st July. This is more than just a bit of corporate housekeeping and may well shape whether we really see competition in European derivatives trading. Right now Liffe clears through LCH and yes, this is the same clearing house that Nasdaq’s new derivatives market NLX will be using. read more

Double whammy

Anne Plested, Fidessa

Jun 03, 2013

The latest published version of MiFIR is narrowing waivers, while widening its impact. Specifically, it has added a double cap limit to the pre-trade transparency reference price waiver. Limitations that may apply to the 4 existing waivers continue to evolve even as the Irish presidency of the Council of the European Union enters its final month before handing over to Lithuania. Article 4 a) was added to the text in December last year and has since switched between the use of a minimum threshold and the introduction (in March 2013) of a trading volume cap mechanism. read more

T2S – another ‘euro fantasy’?

Ronny Cosijns, Capco

May 29, 2013

Like the single European currency and the Channel Tunnel, another ‘euro fantasy’ is now reality. T2S (TARGET2-Securities) is ambitious: a new, bespoke technology solution providing a best-of-breed settlement model. It will handle a substantial portion of European transaction volumes, transferring securities against payment across many different geographies. We have seen a series of cross-border mergers of market infrastructures, creating the conditions for the development of a single clearing and settlement solution across markets. read more

Levelling the trading playing field

Sébastien Jaouen

May 28, 2013

According to The Economist algorithmic trading and high-frequency trading (HFT), virtually unknown until about six years ago, now account for almost 70% of the flow of orders on the main exchanges. Since the introduction of electronic trading there has always been more advanced solutions breaking through to help traders gain a competitive advantage. In today’s fast paced environment, however, HFT has the speedy edge. Can we level the playing field for traders working manually? Regulators have always tried to create a fair market where all participants play by the same rules, but with each breakthrough in trading capabilities, the rules have to evolve in order to protect investors and the markets. read more