Influential former lawmaker Kay Swinburne predicts that the European Union will not force the continent’s corporates to face EU-regulated clearing houses, because it would disadvantage them in respect to netting positions.

At the end of 2020, the European Commission granted UK central counterparties (CCPs) an 18-month extension to equivalence – temporarily recognising UK oversight as equal to EU supervisory standards. But the deal runs out in June 2022, with the prospect that EU-based

When big UK banks began the process of ring-fencing local retail banking, many in the industry fretted that the lenders’ markets businesses might not survive. The fear was that, without access to cheap deposit funding, they would not be able to compete globally and provide attractively priced services to large corporate clients.

Fast-forward to today – two-and-a-half years since ring-fencing was implemented – and there is little evidence those worries were justified. Granted, the monetary and

Japan needs more convincing of the merits for making cryptocurrency investing easier for its population, according to the country’s top regulator.

While Financial Services Agency Commissioner Junichi Nakajima said he’s open-minded about the potential benefits that assets like Bitcoin possess as a quick and cheap way to send cash, in Japan currently, they are mainly being used for speculation and investment, not as a means of transferring money. New challenges are coming from a broader proliferation of firms involved in decentralized finance, known as DeFi, he said.

Cryptocurrencies and how to tax them were nowhere on Congress’s radar until they were suddenly center stage with the Senate’s bipartisan infrastructure package. After much wrangling and controversy, lawmakers on Tuesday approved, as part of the plan, what would be their first-ever crackdown on cryptocurrencies and taxes, without changes sought by the industry. It now heads to the House, where some lawmakers have vowed to press for changes that would address the crypto world’s concerns, though that appears to be a longshot.

Here are five things to know about the provisions:

Mortgage giants Fannie Mae and Freddie Mac posted strong earnings growth during the second quarter, with both companies bolstering their capital reserves and net worth to set the stage for the next phase of the debate over their future.

Fannie Mae’s $7.2 billion in second quarter net income represented a 44 percent increase from a year ago, while Freddie Mac boosted net income by 107 percent, to $3.7 billion.

Both companies benefited from rising home prices, and a resurgence in refinancings prompted by falling mortgage rates, which have come down from 2021 peaks seen in March as the Federal Reserve continues to boost its mortgage holdings by $40 billion a month.

Fannie Mae acquired $243.8 billion in refinanced single-family mortgages in April, May and June, compared to $129.5 billion in purchase loans. Freddie Mac provided financing for about 1 million single-family homes, more than 708,000 of which were refinance loans.

“In the second...

By Jon Hay August 5, 2021, GlobalCapital

A new level of harmonization and simplicity in financial markets communication is on the horizon, according to supporters of the Common Domain Model — a coding framework that will allow bonds, repos and derivatives to be described in a single format, potentially making processing more efficient and less manual.

The International Capital Market Association has just finished developing the first version of its part of the CDM, covering simple bond trades and repos, and has released it to market participants to start using.

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By Thomas Helm August 6, 2021, Practice Insight From IFLR

It has been more than three years since MiFID II/MiFIR entered into force but the errors and omissions rate is still high. According to sources, this is due to a lack of systems and controls in entities responsible to report and lingering interpretation issues.

Research, for example, by the ACA Regulatory Reporting Monitoring & Assurance (ARRMA) service has shown that 97% of firms are reporting incorrectly under MiFIR/EMIR and that on average each report has 30 separate error types.

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By Fiona Nicolson July 28, 2021, Funds Europe

The Alternative Investment Fund Managers Directive (AIFMD), which emerged in the wake of the global financial crisis, is currently under review. AIFMD was introduced to tighten regulation of private equity, real estate, and hedge funds. Unlike the UCITS directive that covers traditional and liquid investments such as listed shares, the AIFMD regulates the managers rather than the funds. 

At the heart of AIFMD is investor protection and market stability. The directive’s introduction was a torturous and expensive event for the alternative investment funds industry.

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By Najiyya Budaly August 6, 2021, Law360

The finance watchdog set out proposed disclosure rules on Friday that investment firms authorized in the U.K. will have to follow under a future prudential regime for the sector, which is aimed at boosting competition and ensuring companies can fail without causing disruption.

The Financial Conduct Authority said the planned disclosure requirements for investment companies will apply from January 2022. The proposals will come in force under the forthcoming Investment Firms Prudential Regime, which will require companies in the sector to maintain sufficient capital and have adequate risk controls.

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By Gerald Segal July 13, 2021, FX News Group

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has announced that it is issuing a public statement to remind firms that the receipt of payment for order flow (PFOF) raises significant investor protection concerns.

The regulator added that it also highlights key MiFID II obligations aimed at ensuring firms act in their clients’ best interest when executing their orders.

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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.

full article

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.

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.

full article

The 10-year US Treasury yield fell to the lowest point since February on Thursday, continuing a sharp reversal in the bond market. Jim Grant, founder of editor of Grant’s Interest Rate Observer, joined “Squawk Box” on Friday to discuss what could be next for the bond market.

Interdealer brokers say they may continue to show US dollar Libor swap prices even after regulators have called for screens to go dark in October.

Under the SOFR First initiative, which is promoting a move to the secured overnight financing rate, brokers are being asked to switch off US dollar Libor swap screens altogether after October 22. But two brokers plan to defy those demands, citing transparency requirements and still-current licensing agreements for these feeds.

“Our role is not to