Changes to the UK Power Market will take effect from Friday 1st November 2013.
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Article reports that ISDA has laid out key principles that global regulators should follow to establish consistency across new swaps rules, demonstrating there is still a need for greater coordination. Article quotes Alex McDonald, CEO, WMBA, and David Clark, Chairman, WMBA.
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Comment piece by Alex McDonald, CEO of the Wholesale Markets Brokers' Association on why it is crucial that Matched Principal is maintained in Mifid II.
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ticle reports on the final SEF rules announced by the CFTC. Article quotes David Clark, Chairman, WMBA.
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Article reports that the September deadline for ESMA to draft technical standards covering the extraterritorial aspects of new clearing regulation are unlike to be met. Article quotes David Clark, Chairman, WMBA.
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Article reports that swap dealers and major swap participants have been given respite from providing a pre-trade mid-market mark (PTM) to counterparties on certain FX transactions, after the CFTC issued a no-action letter on 1 May. Article quotes David Clark, Chairman, WMBA.
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Article resulting from a webinar, featuring David Clark, Chairman, WMBA, regarding the London Whale trade scandal.
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Article reports that 18 trade associations and exchanges, including WMBA, have joined to lobby against the European financial transaction tax.
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Speaking in the final panel discussion at the FX Week Europe conference, senior market participants made their predictions about how the FX market will evolve over the next five years. According to David Clark, Chairman, WMBA, in five years' time, many OTC products will not be cleared, because we don't yet have any criteria for standardisation from the European Securities and Markets Authority, nor out of Dodd-Frank and before significant migration of products into clearing can take place, globally acceptable recovery and resolution plans for CCPs must be agreed. It cannot be discounted that extraterritorial aspects of Dodd-Frank will remain, in which case the possibility of on- and off-shore markets in major products may emerge.
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Article discusses the effects of impending regulation on the outlook for interdealer brokers and the role of voice trading. According to Alex MCDonald, CEO, WMBA: “Some level of normality will return when the rules are published. A lot of the rulemaking enfranchises the role of interdealer brokers within market structure.”
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Article reports that ISDA has warned over the "inappropriate" regulation of private benchmarks and indices, in one of the first public responses to a European Commission consultation on the matter. Speaking to Financial News in September, Alex McDonald, chief executive of the WMBA, which produces and publishes three benchmarks, Sonia, Euronia and Ronia, described the idea as "statist".
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Article reports on the views of market participants about whether clearing houses can really prevent the next crisis. According to Alex McDonald, CEO, Wholesale Markets Brokers’ Association, while CCPs play an important part in mutualising counterparty risk in an environment of weaker credit ratings, trade repositories will be a more immediate tool for ensuring regulators’ provision of information relating to the build-up of sectoral and possibly systemic risks.
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The energy market is on tenterhooks over late-stage negotiations that will determine whether commodities are to be included in wider benchmark regulation. Discussions within the European Commission have intensified in recent weeks as it works towards a provisional publication deadline of September 11 for the rules, according to people familiar with the situation. The energy industry fears that EC proposals to hold all benchmark contributors, including commodities, liable for their submissions as well as subjecting them to a legally binding code of conduct would lead to a more opaque market because companies would be hesitant to voluntarily offer information. Alex McDonald, chief executive of the London Energy Brokers’ Association, whose members represent a large proportion of more than $2 trillion worth of energy trading a year in London, said: “There has already been a large-scale withdrawal of voluntary price submissions in the commodities markets because of increasing scrutiny even before these questions of liability were raised by the commission. “If commodities are swept up because of pressure on timing by the commission, this could have permanent detrimental effects on the market.” One EC employee involved in the discussions said: “Getting it right is important to ensure it doesn’t hold people back from contributing to commodities benchmarks. This would not be a good outcome. The question is who has what liability and obligations, and in what form. The regulation is unclear in its current draft. It needs to be clarified quickly.” The news comes as the Index Industry Association, the trade body formed last year by Standard & Poor’s, FTSE and MSCI, has for the first time articulated a set of global best practices for index providers. The guidelines spell out the level of rigour index providers should have in creating and maintaining indices, addressing conflicts of interest, setting internal controls and continuity plans, and establishing governance standards. They also attempt to draw a clear line between the work of independent index providers and the business of price reporting agencies and groups that voluntarily contribute data to benchmarks such as Libor and those in the utility sector. Benchmarks have been subject to intense scrutiny by regulators in the wake of the Libor and other benchmark-rigging scandals. Rick Redding, executive director of the IIA, said the group had shown the standards to regulators and that the guidelines were a “living, breathing document” that would evolve over time. He added this would apply to commodity indices that are transaction based.
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