Article reports that commodity brokers who face a loss of business due to the shift of derivatives onto exchanges, are seeking reprieve under European proposals allowing them to maintain control of less transparent niche markets. According to Alex McDonald, CEO, London Energy Brokers’ Association (LEBA), energy derivatives that do not trade continuously should be treated differently to other asset classes such as equities. Commenting on ISDA’s proposals that MiFID II regulation should extend to energy and commodities trading, Alex McDonald states that regulators will need to provide clarity on which contracts will be eligible for trading on OTFs.
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Article reports on the recent proposals made by the Basel Committee on Banking Supervision’s which aim to close loopholes that until now have allowed banks to cut capital requirements by parking assets in their trading books. Bankers and lawyers said the proposals, if approved, would push up capital requirements and could making buying and selling assets – as opposed to holding them to maturity – far less profitable. According to David Clark, Chairman, Wholesale Markets Brokers’ Association, “this is a consultation paper that should not be underestimated. Its outcome will dictate not only how much banks will have to allocate to their trading and banking books but also their business models.”
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Article reports that the Wholesale Markets’ Brokers Association (WMBA) will begin trading derivatives using Ronia, offering a hedge against pound denominated bond investments. According to Alex McDonald, CEO, WMBA, a group of 7 dealers will begin making markets in swaps referencing the Ronia daily fixing from April 17 2012.
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Article reports that five banks are to launch a market in derivatives, overseen by the Wholesale Markets’ Brokers Association (WMBA). According to WMBA, there will be strong demand from institutions to use these derivatives as they increasingly require hedging tools in an effort to satisfy Basel capital rules.
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Article surveys the City’s leading industry figures ahead of the Budget 2012. David Clark, Chairman, Wholesale Markets Brokers’ Association, said: “the market would like to hear some reinforcement of the government’s support for the role of the City rather than more counterproductive attacks of a rhetorical nature, such as on remuneration.”
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Article reports that the Wholesale Markets Brokers’ Association (WMBA) will introduce derivatives trading on its repurchase overnight index average (Ronia) from April 2012. The WMBA will offer a hedge against pound-denominated bond investments, with Icap, Tullett Prebon, Tradition and BGC Partners to serve as brokers for the derivatives.
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Article reports that commodity traders have raised concerns regarding the latest amendments to new commodities trading rules, enshrined within MiFID, that could impose stringent limits on positions. Commenting on the issue, Alex McDonald, CEO, Wholesale Markets Brokers’ Association, said: “Trading venues are not in a position to know their client’s positions and therefore would be unable to comply with the Mifid II as drafted by Ferber.”
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Article reports on the recent growth of commodity trading activity amongst interdealer brokers. According to the article, commodities products have a growing appeal to interdealer brokers and now account for nearly a third of total revenues. Commenting on the trend, Alex McDonald, CEO, Wholesale Markets Brokers’ Association, said: “There are several reasons why IDBs are increasing their presence in commodities, especially those related to energy. It largely has to do with the creation of regional or even global marketplaces for products and therefore the increased need to manage risk as clients create a balance sheet and treat these products as an asset class.” David Clark, chairman, Wholesale Markets Brokers’ Association, adds: “IDB clients are increasingly expanding into the commodities markets and so it follows that they [IDBs] would too.”
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Article reports on the new principles published by the Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (Iosco) allowing clearing houses to launch FX options services. The article reports that some central counterparties abandoned plans to launch FX options clearing after the original document required them to guarantee settlement, an obligation that could have exposed clearers to large liquidity risks. Commenting on the proposals, David Clark, chairman, Wholesale Markets Brokers’ Association says:
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Article reports on the new principles published by the Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (Iosco) which provide more clarity over FX options clearing. The article reports that some central counterparties abandoned plans to launch FX options clearing after the original document required them to guarantee settlement, an obligation that could have exposed clearers to large liquidity risks. Commenting on the proposals, David Clark, chairman, Wholesale Markets Brokers’ Association says:
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