Economy

Regulators set September deadline for derivatives deal

WHAT THE HELL...IT'S ONLY BEEN 5 YEARS SINCE THE BLOW-UP...WHAT'S THE HURRY, ANYWAY?

http://in.reuters.com/article/2013/05/15/us-g20-derivatives-idUSBRE94E0W020130515

Financial regulators have given themselves until September to try to resolve differences over how to supervise derivatives markets in the wake of the financial crisis, a U.S. watchdog said on Wednesday... Leaders of the Group of 20 economies (G20) pledged in 2009 to make off-exchange traded derivatives like credit default swaps more transparent. They wanted rules in place by the end of 2012, but this has proved difficult to achieve. The delay is partly because regulators want a common approach to avoid costly overlaps that could distort markets and competition among banks. AFTER YOU, GASTON!

"We have an aspirational goal of September for reaching resolution on some of these issues," Brian Bussey, associate director for derivatives policy at the U.S. Securities and Exchange Commission (SEC), told a Chatham House roundtable. The September deadline coincides with a G20 summit in Russia to review progress on the rules.

The plan is for the $640 trillion derivatives sector, dominated by 16 big banks, to have all trades recorded and cleared by third party clearing houses that are backed by a default fund.

I'M BETTING IT NEVER HAPPENS...AND SO ARE THE BANKSTERS!

Hong Kong investors uninterested in BRICS cross index futures

ONCE AGAIN, THE OLDEST CIVILIZATIONS SHOW THAT THEY WEREN'T BORN YESTERDAY...

http://www.scmp.com/business/article/1236997/hong-kong-investors-uninterested-brics-cross-index-futures

With many investors interested in emerging markets, it sounded like a great idea when the BRICS Exchanges Alliance was formed 19 months ago. But it now appears the alliance has been a flop. It has achieved little and its grand idea of cross-border trading of futures contracts across exchanges has fizzled. The emerging markets of Brazil, Russia, India, China and South Africa formed the alliance in October 2011, with Hong Kong Exchanges and Clearing representing China. At the time of the establishment of the alliance, the five exchanges had a combined 9,481 companies listed, with a market capitalisation of US$9.02 trillion. Their combined monthly turnover was US$422 billion, representing 18 per cent of all listed derivative trading worldwide. The aim of the alliance was to develop cross-border trading of products, and to work together to develop other projects.

There has been 15 months of cross-border trading. Yet little progress has been made so far. The only achievement has been the cross listing of each other's benchmark equity index futures in March last year. Figures show Hong Kong investors have little interest in the products. In the first four months of the year, there was no trading at all in the other four markets' index futures - India's Sensex, Brazil's Ibovespa, Russia's Micex and South Africa's FTSE/JSE Top 40.

In fact, there has been no trading at all in the FTSE/JSE Top 40 futures...

AND THIS MIGHT BE WHY THE ASIANS ARE TAKING A PASS...

Wall Street Wins Rollback in Dodd-Frank Swap-Trade Rules

NO RULE OF LAW...NO TRANSPARENCY...NO REGULATION...NO DICE!

http://www.bloomberg.com/news/2013-05-16/banks-set-to-win-rollback-in-dodd-frank-swap-trade-rules.html

JPMorgan Chase & Co (JPM)., Goldman Sachs Group Inc (GS). and the world’s largest banks won rollbacks in final Dodd-Frank Act rules that promise to transform the private swaps market by increasing competition.

The Commodity Futures Trading Commission voted 4-1 in Washington today on rules determining how buyers and sellers must trade credit-default, interest-rate and commodity swaps in a $633 trillion global market. The rule weakened a proposal by reducing the number of price quotes buyers must seek on swap-execution facilities after banks and asset managers said a five-quote requirement was onerous and would impair trading.

The vote on the rules represents “the start of a process that could eventually lead to a seismic change in trading of over-the-counter derivatives,” Richard Repetto, an analyst with Sandler O’Neill & Partners LP in New York, said in a telephone interview yesterday before the meeting. “It is a switch from an opaque, bilateral market to something where there is some price transparency and a more open and automated market.”

The trading regulations are the latest step in efforts by the CFTC and Securities and Exchange Commission to curb risk and increase transparency in the swap market. Largely unregulated trades helped fuel the 2008 credit crisis that led to the collapse of Lehman Brothers Holdings Inc. and a U.S. rescue of New York-based American International Group Inc....

MORE SAUSAGE MAKING...

CFTC adopts SEF rule, including RFQ3, voice broking

http://www.reuters.com/article/2013/05/16/idUSL2N0DX1NE20130516

The Commodity Futures Trading Commission on Thursday adopted a final rule laying out core principles for new trading platforms known as Swap Execution Facilities, or SEFs.

The rules will allow negotiating of deals over the telephone between banks and their brokers.

The minimum amount of quotes a buy-side client needs to gather before entering a swap - the so-called Request For Quote (RFQ) system - will be set at three.

Only Commissioner Jill Sommers voted against the rule.