By Samuel Wilkes May 25, 2021, Risk You wouldn’t catch a miner going down a shaft littered with dead canaries. Nor will you catch the buy side wanting to start reporting under a regime their peers are still wrestling with three years after it was implemented.

And yet, repeated recommendations by the European Union’s watchdog have pressured legislators to push buy-side firms into scope of a dreaded reporting regime set out within Europe’s markets rules.full article

By Alexander Weber and Silla Brush May 20, 2021, Bloomberg Zero-commission stock brokers are coming under increased scrutiny in the European Union as officials suspect their business model might run counter to the bloc’s market regulations.Services including Etoro Europe Ltd. and Trade Republic Bank GmbH have sprung up to offer European investors cheap ways to trade. While they’re smaller than their U.S. counterparts such as Robinhood Markets Inc., regulators say they could grow rapidly and are used mostly by investors under the age of 30 on smartphones.full article

By Víctor García Priego May 21, 2021, Money Marketing

Institutional platforms have enjoyed a favourable environment in the past few years. Pretty much everything that has shaped the European fund industry – from the increase in cross-border distribution to MiFID II – has been a driver of growth for them.

Platforms are convincing an increasing number of distributors across Europe and Asia that efficiency does not need to come at the price of standardisation. However, things look different from the product providers’ perspective.

full article

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By Thomas Hale, Harriet Agnew, Michael Mackenzie, and Demetri Sevastopulo May 28, 2021, Financial Times When the Biden administration announced a fresh investigation into the origins of the Coronavirus outbreak in Wuhan on Tuesday, the Chinese reaction was swift and furious.

Zhao Lijian, foreign ministry spokesperson, accused the US of “political manipulation” and of “stigmatizing” China — the sort of regular spat that has prompted growing comparisons to the cold war.full article

By Brian Chappatta May 28, 2021, Bloomberg Over the past couple of weeks, I’ve been tweeting near-daily updates of the following chart, which shows the amount of cash placed at the Federal Reserve’s overnight reverse repurchase facility. Use soared to a record $485.3 billion on Thursday, capping an unprecedented surge:

By Alexandra Scaggs May 28, 2021, Barron’s More than a year after the pandemic, US officials are looking at ways to prevent Treasury-market blowups like the one that happened last year. 

One popular idea falls outside the debate on hedge funds or bank regulations: Officials want to make it easier for foreign governments to trade Treasuries for cash in a crisis without having to offload securities. full article

By John DizardMay 29, 2021, Financial Times

Sometime before the end of this year, at the intersection of Wall Street and the Washington swamp, a deal is going to have to be done about how the US government funds itself.

Into the mix will be a push for reforms to ensure that a rapidly rising pile of government debt can be traded without overwhelming the financial system.full article

By David HeunMay 28, 2021, American Banker Clean data is key to instant payments, real-time settlement, open banking initiatives and blockchain technology — but such details are often lost or garbled when sent between parties. To better preserve this data, the US financial services industry is turning to the ISO 20022 messaging standard.

Essentially, ISO 20022 allows banks and corporations to handle cross-border payments that can carry extensive information in standardized data fields, taking much of the mystery out of each transaction and allowing banks to streamline other operations because of this added clarity.full article

By James Langton April 28, 2021, Investment Executive A trio of US industry groups is championing the idea of further shortening the trade settlement cycle from T+2 to T+1.

The US Securities Industry and Financial Markets Association (SIFMA), the Investment Company Institute (ICI) and The Depository Trust & Clearing Corporation (DTCC) have announced that they’re working together to reduce the U.S. settlement cycle.full article

By Wendy Lisney April 28, 2021, Global Investor Group As swap execution facilities capture a growing percentage of euro sterling-denominated interest rate derivatives trading, the chief executive of trade body ISDA has called for equivalence between Europe and the UK to reduce fragmentation and prevent a negative impact on liquidity in European derivatives markets.

“As the EU and UK trading venues rules are almost identical, there seems no reason why equivalence should not be possible,” said Scott O’Malia at an ISDA forum on Wednesday afternoon.full article

By Chris Flood April 28, 2021, Financial Times The UK’s financial regulator has proposed several “quick fixes” to rules covering investment research and reporting requirements for share trading to ensure that asset managers are not at a disadvantage to their European competitors now the country has left the EU.

The Financial Conduct Authority suggested the tweaks after EU authorities last year revealed a wide-ranging series of updates to the pan-Europe market rules, known as MiFID II, which came into effect in 2018.full article

By Huw Jones April 28, 2021, Reuters The hit to the City of London from Brexit has been less severe than initially predicted but may have further to play out, Britain’s top financial services official said on Wednesday.Britain was under “no illusions” that a post-Brexit “steady state” has been reached, in terms of banks settling on locations for their European operations, Katharine Braddick, head of financial services at Britain’s finance ministry told an event held by the Peterson Institute for International Economics.full article

By Huw JonesApril 27, 2021, Reuters Shortly after Britain left the European Union, finance minister Rishi Sunak pledged a series of measures he dubbed “Big Bang 2.0” to ensure the City of London remained one of the world’s top financial centers.

Four months on, many financiers say his reforms to date are a far cry from Margaret Thatcher’s explosive changes of the 1980s, which were known as Big Bang and led to London dominating much of global finance during the following decades.full article

By Martin ArnoldApril 28, 2021, Financial Times Europe’s top financial stability supervisor has warned of a potential “tsunami” of corporate insolvencies once governments’ crisis-era support is withdrawn and called for a shift to more targeted policies that help otherwise viable companies which are struggling with too much debt.

The number of businesses filing for insolvency fell sharply in most European countries after the Coronavirus pandemic hit the region last March and stayed abnormally low for the rest of the year.full article

WASHINGTON—The new enforcement chief for the Securities and Exchange Commission resigned after just a few days on the job, the agency said Wednesday, following a judge’s questioning of her conduct in a lawsuit involving Exxon Mobil Corp.

Alex Oh, a former partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP, will be succeeded on an acting basis by Melissa Hodgman, the SEC said.

Ms. Oh was the first major hire announced by new Chairman Gary Gensler, who was sworn into his role on April 17. The enforcement director is the SEC’s most high-profile staff job, managing a division of 1,300 people and fashioning a strategy for regulating Wall Street.

Ms. Oh decided to resign after U.S. District Judge Royce Lamberth, in an order issued Monday, questioned her conduct during a deposition in a lawsuit filed against Exxon Mobil. Ms. Oh’s law firm, Paul Weiss, represents Exxon in the matter.

Mr. Gensler didn’t comment on the reason for Ms. Oh’s...

By William Shaw April 27, 2021, Bloomberg The $200 trillion derivatives industry is being given leeway to use benchmarks other than the one that’s long been promoted as the US successor to Libor once the discredited benchmark is retired.

Banks and asset managers will be helped to trade securities pegged to Ameribor, an alternative to the Secured Overnight Financing Rate, Ann Battle, head of benchmark reform at the International Swaps and Derivatives Association, said in comments to Bloomberg. The global industry body now plans a similar approach for three other alternative reference rates.full article

By Robert Mackenzie Smith April 28, 2021, Risk The head of an industry group tasked with leading the transition away from US dollar Libor has urged market participants to be wary of adopting any replacement rate “that just feels like Libor”.

“Why that would be appealing after all we’ve been through, I have no idea,” said Tom Wipf, chair of the Federal Reserve-backed Alternative Reference Rates Committee. “I find that quite puzzling.”full article

By Blake Evans-Pritchard April 27, 2021, Risk The International Swaps and Derivatives Association plans to publish a new fallback protocol before the end of the year to help markets such as India and the Philippines transition away from their local interest rate benchmarks, which are reliant on the outgoing US dollar Libor rate.

“We are considering publishing a second protocol to cover those Asia-Pacific benchmarks that we haven’t covered before [and] we are hoping to finish the work by the end of this year,” said Jing Gu, head of the Asia legal team at ISDA, speaking at Risk.net’s Libor Live virtual event on April 27.full article

By Ben St. Clair April 27, 2021, Risk A senior UK regulator has dismissed concerns about the continued use of Libor in sterling derivatives markets, despite the fading benchmark underpinning nearly half of swaps notional traded since April 1, when participants were told to ditch the rate in all but risk-reducing trades.  

Edwin Schooling Latter, director of markets and wholesale policy at the UK’s Financial Conduct Authority, said the “40-odd per cent” of sterling swaps trades linked to Libor since the Bank of England and FCA imposed an effective ban on new Libor risk was “temporarily inflated” by risk reduction activity ahead of the benchmark’s December 31, 2021 demise. full article