The European Union’s banking regulator has proposed guidance for financial-sector compliance officers, another step in the bloc’s effort to revamp its anti-money-laundering system.
The proposal from the Paris-based European Banking Authority is the latest move by the EU to harmonize anti-money-laundering rules across member states and shift implementation away from national authorities.
By Wendy Lisney May 7, 2021, Global Investor Group ICE Benchmark Administration (IBA), part of the Intercontinental Exchange group, has launched a consultation on ending the publication of all tenors of ICE Swap Rate settings based on Libor, the outgoing benchmark interest rate.
In a statement on Friday afternoon, the London-based Libor administrator said it does not expect the necessary input data to calculate the settings, which apply to eligible interest rate swap transactions referencing sterling Libor, after December 31.full article
May 9, 2021, Regulation Asia The BCBS (Basel Committee on Banking Supervision), CPMI (Committee on Payments and Market Infrastructures) and IOSCO (International Organization of Securities Commissions) are inviting clients and non-bank intermediaries to complete a survey on the use of margin calls.
The survey is part of an examination into liquidity shortfalls during the early stages of the COVID-19 pandemic in March and April 2020.full article
By Philip Stafford, Eva Szalay, and Adam Samson May 7, 2021, Financial Times A pushback against stocks-like products in Germany and tougher talk in Washington suggest that key financial regulators are bristling at cryptocurrency operators’ incursions into?tightly-controlled public markets.
Crypto industry executives and securities law experts around the world are closely scrutinizing the tussle between German regulator BaFin and crypto exchange Binance, which deepened this week.full article
By Joe Parsons May 7, 2021, The Trade When the UK and EU announced their last-minute post-Brexit agreement and there was little to no mention of financial services, the eventual divergence on trading regulation was inevitable.
Early signs of the UK’s split from EU regulations came last year when the UK Treasury confirmed it would not implement the Settlement Discipline Regime (SDR), set out under the Central Securities Depository Regulation (CSDR).full article
By Karen Brettell May 6, 2021, Reuters A group of banks and investors overseeing the shift of trillions of dollars to the new benchmark US interest rate SOFR on Thursday published a list of indicators that it wants to see progress in so it can recommend a forward-looking SOFR rate.
Investors are facing a year-end deadline to stop basing new loans and trades on Libor, the London Interbank Offered Rate, which is being phased out due to concerns about the amount of derivatives using the rate, which in many cases is based on assumptions about their borrowing costs and not actual trades.full article
By Gary Silverman and James Politi May 6, 2021, Financial Times The US Federal Reserve has warned that existing measures of hedge fund leverage “may not be capturing important risks”, pointing to the collapse of Archegos Capital as an example of hidden vulnerabilities in the global financial system.
The US central bank’s semi-annual report on financial stability found that some asset valuations are “elevated relative to historical norms” and “may be vulnerable to significant declines should risk appetite fall.”full article
By Bob Pisani May 6, 2021, CNBC New Securities and Exchange Commission Chairman Gary Gensler will testify before the House Financial Services Committee on Thursday.
It’s the third House hearing focused on GameStop, but Gensler’s first appearance as chairman before the committee.full article
By Robert Mackenzie Smith May 6, 2021, Risk In the US Treasury market, it’s not quite business as usual any more. The world’s most important debt market is witnessing instability, as buyers periodically fail to show up. This has led some traders at primary dealers to question whether the overall structural demand is enough to meet the avalanche of supply.The amount of debt being issued by the US Department of the Treasury has increased by 50% across the curve and almost doubled on some tenors in 2021. This is prompting volatility at debt auctions, as the market struggles to find a clearing price.full article
By Huw Jones May 5, 2021, Reuters Britain will scrap a rule inherited from the European Union that aimed to open the listed derivatives market to more competition, saying it was not appropriate for Britain to implement it alone.
Britain had championed the “open access” rule that allows buyers and sellers of derivatives listed on exchanges across the EU to choose where they clear their contracts, rather than be locked into using a clearer owned by the exchange.full article
By Oliver Wade May 5, 2021, Global Investor Group The European Commission underlined that “no decision” has been made on changes that may be proposed to amend the impending Central Securities Depositories Regulation (CSDR).
Mairead McGuinness, commissioner of financial services, financial stability and capital markets union at the European Commission, said in a letter: “At this point in time, no decision has been made on the changes that may be proposed as part of the Commission proposal to amend CSDR.”full article
By Dave Michaels and Alexander OsipovichMay 5, 2021, The Wall Street Journal Wall Street’s top regulator will study potential new rules related to two recent episodes of stock-market turbulence—the GameStop Corp. frenzy among small investors and the implosion of Archegos Capital Management.
In testimony prepared for the House Financial Services Committee, Securities and Exchange Commission Chairman Gary Gensler says applications that “gamify” trading—by using appealing visual graphics to reward a user’s decision to trade—might encourage frequent trading that results in worse outcomes for investors. Some Democratic lawmakers have blamed gamification for the boom in retail trading that helped drive the rise in GameStop shares.full article
By Jennifer Surane and Hannah Levitt May 5, 2021, Bloomberg The Federal Reserve is deciding whether to give financial technology companies more direct access to its payment system after many of the upstarts swelled in popularity during the pandemic.The central bank invited the public to comment on proposed guidelines that would allow companies with “novel types of banking charters” to access accounts and services provided by the Fed, according to a statement Wednesday.full article
By Juliet Chung, Gregory Zuckerman, and Julie Steinberg May 5, 2021, The Wall Street Journal Banks across Wall Street are looking to tighten the lending terms of some of their hedge-fund clients on the heels of Archegos Capital Management’s collapse.
Firms including Credit Suisse Group AG, Morgan Stanley, and UBS Group AG are reviewing their businesses that offer financing to hedge funds and family offices for potential vulnerabilities to safeguard against another Archegos-style event, said bankers and hedge-fund managers.
full article
By Steven Arons May 6, 2021, Bloomberg JPMorgan Chase & Co. is further expanding its balance sheet in Frankfurt as it adapts to a post-Brexit Europe.The US bank expects to add a similar amount to its European hub in 2021 as it did last year, according to its annual report for JPMorgan AG. The unit increased by about €180 billion ($216 billion) to €244 billion last year, the document said, confirming an earlier Bloomberg report.full article
By Alex Roha May 3, 2021, HousingWire The Federal Housing Finance Agency (FHFA) finalized a rule on Monday that will require Fannie Mae and Freddie Mac to develop plans that would ensure upon their eventual exit from conservatorship, they won’t do any large scale harm to the financial system.
Should the FHFA be appointed receiver for the government-sponsored entities under the Housing and Economic Recovery Act of 2008 (HERA), the so-called “living wills” would facilitate a “rapid and orderly resolution” from conservatorship, the agency said Monday.
full article
By Michelle Price May 3, 2021, Reuters The US nonprofit Digital Dollar Project said on Monday it will launch five pilot programs over the next 12 months to test the potential uses of a US central bank digital currency, the first effort of its kind in the United States.
The private-sector pilots initially will be funded by Accenture Plc and involve financial firms, retailers, and NGOs, among others. The aim is to generate data that could help US policymakers develop a digital dollar.
full article
By Yakob Peterseil and Katherine Greifeld May 4, 2021, Bloomberg Forget a Bitcoin ETF. For many Wall Street stock traders the most eagerly awaited exchange traded funds are just as speculative — and even more controversial.
Known as short-volatility products, a fresh twist in a legal battle is bringing these strategies riding calm markets back into the limelight at a time when at least three issuers are trying to launch new funds.full article
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