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Banks still pose the risk of being “too big to fail”
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31 Aug
2016

Banks still pose the risk of being “too big to fail”

  • 31st August 2016
  • Darshna Pindoriya

On 18 August 2016, the Financial Stability Board (FSB) published two final guidance papers for authorities and firms as part of the agenda to end the “too big to fail” risk. Some progress is being made, and the FSB has said that “banks have begun to develop issuance strategies to meet new total loss-absorbing capacity..

26 Aug
2016

Updates to clearing obligations under EMIR- the phase-in begins

The phase-in for central counterparty clearing (CCP) for certain Over-the-Counter (OTC) derivative contracts began in 21 June 2016 for certain contracts, with many more soon to follow, until all in-scope contracts are subject to the obligations by 9 August 2019. The European Market Infrastructure Regulation (EMIR) requires certain classes of OTC derivative contracts to be..

24 Aug
2015

5 key changes that ESMA is recommending to EMIR

  • 24th August 2015
  • Daniel Simpson

JWG analysis. This month, ESMA published four reports in which they outlined the modifications that they believe are needed to the EMIR legal framework. JWG have had a look and, below, we pick out five key changes that are being proposed. Clearing obligation. ESMA is recommending two minor changes to the clearing obligation.  These are..

27 Feb
2014

ESMA publishes 3rd country CCP list

  • 27th February 2014
  • RegTechFS

JWG analysis. ESMA has published an updated list of non-EEA central counterparties (CCPs) that have applied for recognition under Article 25 of EMIR. ESMA has taken care to note that the list is not exhaustive and only includes applicants that have agreed to have their name mentioned. Those CCPs that pass the approval process will be permitted..

06 Feb
2014

The OTC mirage: As deadlines near, global trade reporting follies emerge

  • 6th February 2014
  • RegTechFS

JWG analysis. With the 12 February EMIR trade reporting deadline just around the corner, the atmosphere in the derivatives industry suggests just as much turmoil as ever. Issues surrounding LEI registration, UTI reconciliation and trade repository affiliations persist as the rush to comply with mandatory reporting rules begins.  The industry is still grappling with issues that..

02 Oct
2013

FMIs/investment firms being used as guinea pigs? Early UK rulemaking forces non-bank firms to define own best practice

  • 2nd October 2013
  • RegTechFS

Last week, HMT published a consultation paper on secondary legislation to extend the 2009 UK Special Resolution Regime – which currently only covers banks – to investment firms, CCPs and group undertakings. While the legislation mostly concerns the rights of resolution authorities to enforce special insolvency processes on these firms if they fail, with power..

10 Sep
2013

EU-US OTC equivalency? Or just another regulatory tug-of-war?

On 1 September, ESMA issued its advice to the Commission on declaring countries outside the EU to be equivalent under EMIR. The good news is that at long last we should have some certainty on what approach to expect.  The bad news: we are in for years of frustration as practitioners attempt to nit-pick their..

19 Aug
2013

EMIR’s burning question: How risky are OTC derivatives CCPs?

  • 19th August 2013
  • RegTechFS

By Dr David Murphy No financial institution likes to remind its clients that it might fail, so it is no surprise that OTC derivatives clearing houses don’t heavily advertise their risks.  But they are risky.  A clearing house could fail in at least three different ways: 1) One or more clearing members could default, and..

12 Aug
2013

The next generation: CCP waterfalls and mutuality

by Dr David Murphy. The key protection which CCPs have against counterparty credit risk is their default waterfall.  They take margin from clearing members and their clients, and default fund contributions from clearing members, and use these amounts as a bulwark against losses should a clearing member default. The different levels in the default waterfall..

09 Jul
2013

Early warning signs: Data protection barriers ahead

Is data protection soon to become the biggest compliance hurdle facing the back office? In an effort to improve the protection offered to consumers, and to harmonise data practices, the EU is currently in the process of passing two pieces of legislation: the Cybercrime Directive and the General Data Protection Regulation (GDPR). Few people have..