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Tag Archive: European Market Infrastructure Regulation


Here are 10 questions that you should know if you are based in the European Economic Area and trade in derivatives, whether on-blogexchange or “over-the-counter” (OTC), then you will be impacted by EMIR. This could include real estate investors who use derivatives and swaps (e.g. hedging interest rate and currency risks) to reduce risk rather than for speculative purposes. The exact impact of EMIR will depend on the type of firm, as well as the level and type of derivative exposure of the particular firm.

  1. Should I care about EMIR? (I should hope so)
  2. What are the requirements under EMIR? Continue reading
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Here are 10 questions that you should know if you are based in the European Economic Area and trade in derivatives, whether on-exchange Googleor “over-the-counter” (OTC), then you will be impacted by EMIR. This could include real estate investors who use derivatives and swaps (e.g. hedging interest rate and currency risks) to reduce risk rather than for speculative purposes. The exact impact of EMIR will depend on the type of firm, as well as the level and type of derivative exposure of the particular firm.

  1. Should I care about EMIR? (I should hope so)
  2. What are the requirements under EMIR? Continue reading

The key protection which CCPs have against counterparty credit risk is their default waterfall. They take margin from clearing members and imagestheir 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 – margin, CCP equity, default fund, default fund assessment rights, and so on – are accessed in sequence, much like the tranches of a CDO. Typically the defaulter’s margin and default fund are used first, then an amount of CCP equity is at risk, then the mutual default is used, and typically more default fund can then be called from surviving members. That is, the default waterfall starts off individual, with the defaulter (or rather their estate) paying, and then becomes mutual.  Continue reading

I am re-posting one of my old post with the intention that many of my fellow mates wanted to know the implications of the European

Esma

Esma (Photo credit: SphotoE)

Securities and Markets Authority ESMA on India.

“The RBI and CCIL have expressed reservations and said they would be reluctant to apply for registration under Esma.”

India is “reluctant” to apply for third-country equivalence for the Clearing Corporation of India (CCIL) from the European Commission (EC), while it is also planning to mandate the central clearing of rupee foreign exchange derivatives, a scenario that could potentially force European banks to exit the most profitable part of their derivatives business in the country. Continue reading

Dodd-Frank Trade Reporting isn’t coming … it’s here. February 28, 2013 was the date that Major Swap Participants (MSPs) were imagesrequired to begin reporting equity, foreign exchange and other commodity swaps. And this is just the beginning of a series of milestones in the regulation that was designed to prevent future “too big to fail scenarios,” such as what occurred during the Global Financial Crisis of 2008. But, there is a bigger story here around regulation and compliance and how IT is used to ensure transparency, accuracy and accountability in reporting.

Regulation, Regulation and more Regulation

While Dodd-Frank is a U.S. regulation under the supervision of the Commodities Futures Trading Commission (CFTC), any financial institution doing business with a U.S. bank will need to comply. Continue reading

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