Thursday, March 16, 2017

OFR Publishes Trio of Central Clearing Studies

Author: David Schwartz

Over the past few weeks, the U.S. Office of Financial Research (OFR) has published a trio of papers looking at various aspects of central counterparties (CCPs). These papers range from the best way to stress test CCPs, to the adequacy of CCP margin requirements and the relative risks and utility of central clearing to repo markets.

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Tuesday, March 1, 2016

US and EC Agree on a Common Approach to Trans-Atlantic CCPs

Author: David Schwartz

In a joint statement issued on February 10, the European Commission (EC) and the U.S. Commodity Futures Trading Commission (CFTC) announced agreement on a common approach regarding requirements for central clearing counterparties (CCPs).  The agreement is the result of a multi-year analysis of differences between the CFTC and EU regulatory requirements. The accord commits the EC and CFTC to base regulations on international rather than parochial principles, and for both the CFTC and the European Commission Services to work together, along with counterparts across the global regulatory community, to develop further these principles and further harmonize the standards to which internationally active CCPs are held.

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Thursday, April 3, 2014

SEC Proposes Rules for Systemically Important and Security-Based Swap Clearing Agencies

Proposal Reserves Great Discretion for the SEC

Author: David Schwartz
“Clearing agencies that have been designated as systemically important or that clear security-based swaps are a backbone of the U.S. financial markets. The enhanced regulatory regime proposed today reflects the importance of effective regulation of these entities.” 
---SEC Chairman Mary Jo White 

The Securities and Exchange Commission voted on March 12 to propose new rules to enhance the oversight of clearing agencies that are deemed to be systemically important or that are involved in complex transactions like security-based swaps. The Dodd-Frank Act calls for a new framework of regulation for certain clearing agencies, and these rules, if adopted, would apply to SEC-registered clearing agencies that have been designated as systemically important by the FSOC. The rules would also sweep into their regulatory ambit clearing agencies not deemed systemically important, but that take part in highly complex transactions, such as clearing security-based swaps.

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Sunday, March 17, 2013

The Day Arrives for Mandatory Clearing of Swaps

Author: CSFME
The first in a series of dates implementing mandatory swaps clearing finally arrived last week. March 11, 2013 marked the date by which swap dealers, major swap participants, and private funds active in the swaps market were required to begin clearing swaps. The March 11 deadline applies to certain index credit default swaps, or CDS, and interest rate swaps that were entered into on or after March 11, 2013. The new clearing requirement applies only to newly executed swaps, as well as changes in the ownership of a swap. Non-financial entities using swaps for hedging commercial risk, however, are exempt from clearing.  The CFTC has put together a handy chart laying out the five swap classes required to be cleared.  
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