A tightening up of end user exemptions would have more hedge funds falling under proposed capital requirements and OTC derivative clearing and execution mandates. This language is up for quite a fight in the Senate still, as the definition of “Major Swap Participant” will have major implications for the financial markets post-reform, but it seems […]
Tag: Regulation
Swap Desk Spin-Offs Not Seen As Workable (Derivatives Week)
Is it clear to anyone yet that I don’t like the Lincoln OTC derivative proposal? Kevin McPartland, senior analyst at the TABB Group in New York, said it depends on how the rules are written. “If they force [dealers] to completely spin them off, that just won’t work,” he said. The idea, he said, is […]
Swaps spin-off proposals look costly for banks (Reuters)
The recent proposal by Senator Lincoln isn’t bad because it will cost banks, but because it is ignores how the OTCderivative markets function. Its pretty obvious from my comments I’m against most of what she’s proposed here. It feels as if she’s ignoring everything Congress has learned since early 2009, most of which came through […]
OTC Derivatives Reform Update: The Senate Ag Bill
The forthcoming bill from the Senate Ag committee seems to take us back to early 2009 when legislators thought the entire OTC derivatives market could be moved on exchange. All I smell here is politics, and a huge lack of effort to create the best new system for regulating derivative, instead thinking only about re-election. […]
Senator Warns of ‘Populist Fervor’ Against Wall St. (NY Times)
Senator Gregg is standing up for Wall Street – a little shocking. He is a Republican and they tend to be pro-bank, but politics have kept most in DC from saying anything nice about financial services firms. My comments here focus on the linkage (or lack thereof) between execution and clearing and how most can’t […]
Dodd Swaps Bill May Give Trading Edge to CME, ICE (BusinessWeek)
Since the OTC derivative reform debate began, Washington and Wall Street have argued about whether it makes sense to move certain OTC derivative products onto exchange platforms for execution. The Dodd bill seems to think this is the way to go, whereas the House Bill has a better grasp on the idea of non-exchange electronic […]
The Fight to Regulate Derivatives (NY Times)
Health care reform and consumer protection has overshadowed derivatives reform for weeks, and the NY Times has finally shined the spot light back on the developing OTC derivative landscape. In the article, I specifically point out the less than ideal approach of having both the SEC and CFTC oversee the market and the fact that […]
‘Several Competing’ Clearing Houses Needed for Swaps (Securities Industry News)
I participated in a panel discussion this morning focused on opportunities for execution venues an exchanges created by OTC derivatives reform. As legislation will likely push standardized OTC products onto execution platforms (not necessarily exchanges mind you), the opportunities for these platforms (many owned by inter-dealer brokers) are numerous. Securities Industry News covered the event: […]
Dodd Measure Would Limit Hedge Funds, Prop Trading (MarketsMedia)
Regardless of how much proposed financial reform legislations cuts down on proprietary trading by the banks (if at all), we still have a few years to go before new rules would take effect. My comments from the article: It’s likely that some form of legislation will be enacted before the end of the year. “Final […]
Dodd Broadens Major Swap Player Definition (Derivatives Week)
We should get much more information about the Senate’s view on OTC derivative reform on Friday when the first amendment to the bill is expected. In the meantime: While most derivative pros did not expect the broader definition in Dodd’s revised bill, they believe the Reed-Gregg amendment will focus heavily on exemptions. “The way it […]