By Dylan Tokar May 4, 2021, The Wall Street Journal Companies looking to show investors their commitment to sustainability are relying more on the work of their chief compliance officers.

The role played by compliance in ensuring that employees act ethically has a natural place in corporate efforts to attract sustainability-minded investors, these companies say.full article

By Simon Jessop and Huw Jones May 5, 5021, Reuters European Union policymakers faced a call on Wednesday to break a ‘climate-finance doom loop’ by making banks hold up to three times more capital to cover risks from fossil fuel activities.Finance Watch, which campaigns to make finance work better for society, has written to European Commission President Ursula von der Leyen, urging the EU to toughen capital rules for banks and insurers involved in environmentally damaging activities.full article

By Huw Jones May 4, 2021, Reuters French banks and insurers should speed up their response to climate change, France’s banking regulator said on Tuesday, after publishing what it called the world’s first climate-related stress test of banks.

Other financial watchdogs around the world will also be conducting similar tests on the finance industry to help to reduce the impact of climate change on economies. Banks and other finance companies will have to disclose to investors the impact of climate change on their balance sheets under proposed European Union rules.

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By Samuel Wilkes May 2, 2021, Risk As ill-fated regulatory encounters go, few can rival the star-crossed introduction of derivatives reporting in Europe. Repo and securities lending participants have taken comfort in the fact that their own entrée to the Securities Financing Transactions Regulation (SFTR), which governs repo reporting, was not quite as disastrous.

Even so, reconciling counterparty reports for the same repo trade – known as pairing and matching – has troubled the SFTR’s debut, sources tell Risk.net. A list of issues maintained by the International Capital Markets Association (ICMA) is said to contain more than 50 separate items that either cause rejections in reports or breaks in reconciliation when pairing and matching trades.full article

By Manmohan Singh May 4, 2021, Risk Does the safest asset in the world need to be made safer? That is the question regulators have set themselves as they consider reforming the US Treasury market, in the wake of unprecedented volatility witnessed a year ago amid the Coronavirus crisis – a move that could result in a shift to mandatory clearing.

The off and on debate over US Treasury clearing took on fresh urgency in March 2020, when panic selling from funds desperate to raise cash as markets crashed saw dealers struggle to process the mass liquidation of huge off-the-run positions. As spreads blew out and liquidity stuttered, the Federal Reserve was forced to step in and shore up confidence in the basic functioning of the market.full article

By Imani Moise May 4, 2021, Financial Times A wave of cash flooding bank balance sheets during the pandemic has prompted some of the largest US lenders to take the unusual step of advising corporate clients to move money out of deposits.

Banks including JPMorgan Chase and Citigroup have held conversations with some large corporate clients about putting cash into money market funds rather than in deposits, according to people briefed on the talks.

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By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) - The U.S. overnight repurchase rate fell on Tuesday, a day after funding pressures lifted the general collateral (GC) repo rate as high as 0.12% due to the settlement of last week's Treasury auctions, traders said.

The overnight repo rate measures the cost of borrowing short-term cash using Treasuries or other debt securities as collateral.

Analysts expect repo rates to remain steady this week at 0.05% to 0.06% after a blip up on Monday.

One of many overnight repo rates, the GC rate refers to the level or figure corresponding to a basket of securities that trade normally. GC securities can be substituted for one another without changing the repo rate.

On Tuesday, the GC rate hit a high of 0.10% before closing at 0.04%, data from Curvature Securities showed. The repo rate hit a peak of 0.12% on Monday, the highest since February, and closed at 0.10%.

"No doubt the settlement of...

The hunt for a benchmark to replace yen Libor is gaining ground, with Japan’s traders leaning toward the Tokyo Overnight Average Rate in the battle to dominate the financing of the country’s

From derivatives pricing to credit card fraud detection – and a few places in between – artificial intelligence is extending its reach across the financial sector. But difficulties with explaining to regulators and senior management how self-learning algorithms work continue to hold back the use of machine learning in most banks’ core business of lending.

“Credit underwriting is the highest risk use of this technology and we would expect a great deal of explainability to be provided,” says a

The regulatory sandbox, which provides access to regulatory expertise and a set of tools to facilitate pre-launch testing, previously operated on a cohort basis, meaning firms could only apply during specific windows in the calendar year.

However, the new version will be open for year-round applications.

The FCA said: “While the cohort approach was appropriate for a testing environment, which served as a blueprint for regulators all over the world, the sandbox required changes to reflect its maturity and the lessons learned since its inception in 2016.

“The Kalifa Review of UK FinTech recommended that the sandbox be enhanced to provide more value to firms. This included a specific recommendation that the sandbox be made available on a rolling basis, rather than through time-limited windows. 

“In August 2021, the regulatory sandbox moved to always open, allowing firms to submit their applications throughout the year.”

The sandbox is for...

WASHINGTON—The Securities and Exchange Commission will regulate cryptocurrency markets to the maximum extent possible using its existing authority, Chairman Gary Gensler said Tuesday, while also calling on Congress to grant the agency more scope and resources to oversee the sector.

Calling the asset class rife with “fraud, scams and abuse,” Mr. Gensler signaled the SEC is likely to become more active in policing crypto trading and lending platforms, as well as so-called stablecoins.

“We just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West,” Mr. Gensler said in prepared remarks to the Aspen Security Forum. “We have taken and will continue to take our authorities as far as they go.”

U.S. financial regulators have struggled to get their arms around the fast-growing world of cryptocurrency and related financial technologies. Unlike in the securities and derivatives markets, no single regulator oversees...

(Bloomberg) -- Never mind banker burnout, return-to-office headaches, and new pandemic waves. A simple reality stands out for the biggest global investment banks: they’re minting money like never before.

As the dust settles over earnings season, a total profit of more than $170 billion from a dozen of the biggest firms in the past four quarters shows how far the industry has come from the frazzled early stages of the pandemic. JPMorgan Chase & Co. was the standout, earning the equivalent of $131 million a day.

A string of trading wins certainly helped the sector in the early days of Covid-19, and as last year’s market volatility faded, investment bankers were ready to fuel the boom in takeovers and fundraisings via special purpose acquisition vehicles. Banks with wealth and asset management units enjoyed buoyant equity markets as the world economy began to recover, aided by unprecedented government support programs. The same trend also proved a boon...

By Attracta Mooney July 31, 2021, Financial Times A wave of UK government reforms designed to make the City of London more attractive after Brexit has already had one unintended consequence: finance industry executives are cancelling summer holidays to deal with the workload.

The sheer volume of consultations meant there was no time for a break this August, said a policy specialist at one large British asset manager. “It is overwhelming at the moment.”full article

By Thomas Helm July 29, 2021, Practice Insight From IFLR The UK wholesale markets review (WMR), which will roll back various elements of MiFID II in a bid to make the UK more competitive post-Brexit, has adopted a “more-carrots-fewer-sticks” approach to financial regulation, according to sources.

Such a mentality contrasts with the more stringent approach of EU authorities, which are also leading their own review of MiFID II.full article

By Oliver Wade July 20, 2021, Global Investor Group The survey from IHS Markit and Pirum polled securities finance firms’ attitudes to technology in light of the introduction of the Securities Financing Transactions Regulation (SFTR).

Almost 55% of the surveyed firms claimed that the implementation of SFTR has served as a catalyst for rethinking their regulatory reporting process for various regimes, including the Markets in Financial Instruments Directive (MiFID) and European Market Infrastructure Regulation (EMIR).full article

By Najiyya Budaly July 26, 2021, Law360 The Financial Conduct Authority set out rules on Monday that will create a single prudential regime for all investment firms authorized in Britain in an attempt to lower barriers to entry and create better competition in the market.

The City watchdog set out capital requirements for investment companies that it proposes will apply from January 2022. The near-final rules will introduce an Investment Firms Prudential Regime, which will require companies in the sector to maintain sufficient capital and have adequate risk controls.

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July 26, 2021, Funds Europe Asset managers and other market participants are unlikely to see reduced market data costs in the EU under plans for a ‘consolidated tape’ – the digital, real-time publication of market data.

Bloomberg Intelligence said greater transparency would result from the consolidated tape, but data bills – which have been described as “excessive” by industry bodies – for asset managers, broker-dealers, and market makers were unlikely to go down.

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By Chris Flood July 25, 2021, Financial Times The price of corporate research published by independent providers dropped 8% last year as cut-throat competition from large investment banks continued to squeeze revenues for smaller analytics companies.

Independent research providers have complained to regulators in the UK and Europe that their businesses are being hurt by what they say is unfair competition after large banks slashed the cost of research services in recent years.full article

By Alice Tchernookova July 19, 2021, Practice Insight From IFLR Looking at the EU and UK trying to patch up their relations feels a bit like watching a divorced couple struggling to recreate a bond they should probably never have broken in the first place. 

The truth is, the only way forward in the globalized world we live in is through cooperation – and certainly not through division. This is something that Trump’s America failed to understand in its time, and that Johnson’s Britain is now failing to grasp too. full article

By Helen Bartholomew July 19, 2021, Risk The industry group leading euro benchmark transition has called on the European Commission to designate the euro short term rate, or €STR, as a statutory replacement for EONIA. The group is seeking to avert chaos in €9 trillion notional of legacy contracts, which have less than six months to transition before the rate is shut down.

In a letter to Tilman Lueder, the EC’s head of securities markets, James von Moltke, chair of the euro risk free rates working group (RFRWG), warned contract renegotiation had been hindered by the COVID pandemic and Brexit, leaving many struggling to transition Eonia cash and derivatives instruments before the benchmark’s December 31 demise.full article

By James Langton July 13, 2021, Investment Executive While the emergence of “zero-commission” brokers has made investing more accessible to retail investors, underlying practices — such as buying and selling order flow — continue to raise investor-protection concerns among regulators.

Recently, Canadian and US regulators have expressed concerns about the rise in retail investor trading, particularly among novice investors trading on mobile apps at little or no commission. Now, the European Securities and Markets Authority (ESMA) is joining that chorus.full article