ESMA's Ross suggests position limit reforms coming

LME exploring return of open-outcry floor | FIA's first-ever digital conference underscores industry's resilience | Eurex's Book: Industry should come together on margin models

Created for majed2aboshddad.majed@blogger.com | Web Version

June 24, 2020

CONNECT WITH FIA

FIA's Daily Summary for Derivatives Industry Professionals

The European Securities and Markets Authority is looking at possible changes to its commodity derivatives position limits regime under the revised Markets in Financial Instruments Directive "to make that framework more efficient and effective," ESMA executive director Verena Ross told FIA's IDX-V conference. Ross said one move would be to "narrow down" which contracts would be subject to the position limits and "focus on those where we believe it is essential to have that type of framework and regime in place."

Full Story: Futures & Options World (subscription required) (6/23)

LME exploring return of open-outcry floor

London Metal Exchange CEO Matthew Chamberlain told FIA's IDX-V conference that LME is looking into whether the easing of social-distancing restrictions in England on July 4 will enable it to resume open-outcry trading. "We're absolutely working to get back to the ring as soon as possible, obviously driven by government social-distancing legislation," said Chamberlain.

Full Story: Reuters (6/23)

	Biostats programs: app deadline approaching! UofL's online graduate certificate and M.S. in Biostatistics equip professionals of any background to become biostatisticians and advance the life sciences industry through data. Bachelor's degree in any field and exposure to statistics required. Deadline to apply is July 15. Apply today!

Industry Developments

FIA's first-ever digital conference underscores industry's resilience

FIA hosted three hours of virtual programming at its first-ever digital conference on June 23, bringing the global cleared derivatives industry together to discuss key issues. "Resilient industries learn from times of crisis and pivot quickly to make improvements," said FIA President and CEO Walt Lukken in his opening remarks. "That will be the focus of the next three days of IDX-Virtual: What are the lessons learned from recent market volatility and how do we adjust as an industry to make us stronger?"

Full Story: Futures Industry Association (6/24)

Eurex's Book: Industry should come together on margin models

The high market volatility in March exposed many issues that stem from inconsistencies in how central counterparties calculate margin, Eurex CEO Thomas Book told FIA's IDX-V conference, emphasizing a need for standardization. "In general it is a question to reconsider how did models perform and I think it would be good if the industry moves to more convergence of models," Book said.

Full Story: Futures & Options World (subscription required) (6/23)

PwC report sees no future for Hin Leong

A report presented in Singapore's High Court by PwC found a number of irregularities in Hin Leong Trading's "grossly overstated" finances and said the oil trader has no future as an independent firm. "The overstatement existed to conceal significant losses that the Company (Hin Leong) had accumulated over the years," notes the report.

Full Story: Reuters (6/23)

Borsa Italiana may come on the block from LSEG deal

Borsa Italiana could fetch as much as $3.4 billion from rival European exchanges if the London Stock Exchange Group is forced to sell the Italian exchange to satisfy EU antitrust rules for the takeover of Refinitiv. Bloomberg Intelligence analyst Lento Tang says that both "Deutsche Boerse and Euronext would be interested as both need M&A to lift revenue growth and could benefit from cost synergies."

Full Story: BNN Bloomberg (Canada) (6/23)

Whitepaper sees need for margin efficiency

The large margin calls that resulted from the high coronavirus-induced market volatility will have traders and brokers searching for more exchange competition, according to an Acuiti whitepaper. The whitepaper found that clearinghouses and their members had increased their margin requirements, resulting in "massive increases in margins across the global derivatives market."

Full Story: Futures & Options World (subscription required) (6/23)

ED&F Man reportedly discussing sale of brokerage unit

ED&F Man Holdings is looking to sell its brokerage unit, ED&F Man Capital Markets, sources say. The company is reportedly discussing a deal that could value the brokerage at more than $500 million.

Full Story: Bloomberg (tiered subscription model) (6/22)

EU carbon credit prices up over 50% since March
Financial Times (subscription required) (6/23)

BofA analysts: Brexit has devastated pound's status
Financial Times (subscription required) (6/23)

ICE names McClear as corporate risk officer
The Trade (UK) (6/23)

Banks release details of plans for office returns
Financial Times (subscription required) (6/23)

	triReduce benchmark conversion webinar Learn how to transition your existing legacy OTC ICE LIBOR swap portfolios to the new alternative reference rates, or risk-free rates (RFRs). triReduce's award-winning multilateral compression service will provide a proactive, orderly mechanism for conversion, available to all. Watch now. TriOptima is now part of CME Group.

Regulation and Enforcement

EU to study UK's post-Brexit financial rules

The British Treasury has released the government's post-Brexit financial regulation update plans for banks, asset managers and derivatives traders, saying they reflect international Basel standards. The EU now has to determine if the UK rules will meet its equivalence criteria.

Full Story: Reuters (6/23), Financial Times (subscription required) (6/23), S&P Global Platts (free registration) (6/23)

UK FCA to get enhanced powers on Libor

UK Chancellor of the Exchequer Rishi Sunak told Parliament that new legislation will be introduced to give the UK Financial Conduct Authority enhanced powers relating to Libor. Sunak said it is in the interests of financial markets "that the pool of contracts referencing LIBOR is shrunk to an irreducible core ahead of LIBOR's expected cessation, leaving behind only those contracts that genuinely have no or inappropriate alternatives and no realistic ability to be renegotiated or amended."

Full Story: BNN Bloomberg (Canada) (6/23), Regulation Asia (subscription required) (6/23)

Analysis: Next FCA head Rathi faces challenges

London Stock Exchange CEO Nikhil Rathi's new job as the next head of the UK's Financial Conduct Authority comes at a time when the FCA is dealing with coronavirus disruptions, domestic post-Brexit financial regulations and EU equivalence discussions. Rathi's prior government and political experience gives a good indication that he will be able to handle the pressure.

Full Story: Politico Pro (subscription required) (6/23), Financial Times (subscription required) (6/22)

BoE needs industry cooperation for post-trade reform
Waters Technology (6/23)

Bank consolidations look likely, ECB's Enria says
Reuters (6/23)

BoE falling short on diversity, Bailey says
Bloomberg (tiered subscription model) (6/23)

Technology

INTL FCStone uses Validus to monitor EMEA operations

INTL FCStone is expanding the deployment of Eventus Systems' cloud-based Validus surveillance platform to its Europe, Middle East and Africa operations. INTL FCStone began using the system in the US last year for futures activity monitoring.

Full Story: The Trade (UK) (6/23)

FIA News

CFTC Chairman Heath Tarbert joins FIA President and CEO Walt Lukken in the latest FIA Speaks podcast

In the latest FIA Speaks podcast, CFTC Chairman Heath Tarbert discusses the CFTC's response to the unprecedented events surrounding the Covid-19 pandemic as well as the agency's agenda, EMIR 2.2 and cross border negotiations with European regulators and others, and negative pricing of commodities. Listen now!