Saturday, June 27, 2015

Progress Report from the New York Fed's Tri-Party Repo Task Force

Author: David Schwartz J.D. CPA
The Federal Reserve Bank of New York’s Tri-Party Repo Infrastructure Reform Task Force issued a progress report on June 24, 2015. The report touts some impressive progress since the task force’s last update in 2014, including the implementation of the task force’s new settlement regime by the major tri-party clearing player, Bank of New York Mellon.

 “…Earlier this spring, Bank of New York Mellon completed the final piece of its new settlement process for triparty repo, achieving a number of reform goals and serving to bring all triparty repo trades into alignment with the roadmap originally laid out by the Industry Task Force back in 2012. As a result, the share of triparty repo volume that is financed with intraday credit from a clearing bank has dropped markedly, from 100 percent as recently as 2012, to a level averaging 3 to 5 percent today (as compared with the Task Force’s original target of no more than 10 percent). Clearing banks, dealers and investors all made changes to their practices and processes that helped to achieve this goal…”

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Friday, January 31, 2014

European Commission Release: Establishing a Central Database for Secured Financing Transactions

Author: David Schwartz J.D. CPA

On January 29, 2014, the European Commission issued its long awaited proposal for the establishment of a central database for Secured Financing Transactions. This release is a part of a larger regulatory effort aimed at increasing the transparency of certain transactions in the shadow banking sector and to prevent regulatory arbitrage. The proposal aims to increase transparency in secured financing transactions, a term which is defined broadly to include repo, reverse repo, tri-party repo, securities lending transactions as well as total return swaps, collateral swaps and buy-sell transactions.

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