LATEST ARTICLES | COMPLIANCE

BoE and CFTC reinforce cross-border supervision of derivatives clearing in new agreement

Regulators for the UK and US derivatives markets have signed a new cross-border supervisory agreement for clearing houses operating in both countries. The Bank of England (BoE) and the US Commodity Futures Trading Commission (CFTC) announced the signing of a new memorandum of understanding (MOU) where they have established a cooperation framework for overseeing international clearing houses.  

Cum-ex: legal opinions are no sure defence, warn tax experts

Individuals involved in cum-ex prior to 2012 will not be spared from prosecution by producing legal opinions from the time, warn Rahman Ravelli lawyers.Up to 600 names are understood to be on a list in the German prosecutor’s office, representing the full gamut of individuals from all role functions and levels of seniority related to what is now perceived to be a wide-spread conspiracy to cheat European tax authorities by double-claiming on dividends. 

Don’t Just Reopen Trading Floors — Reimagine Them

Dispersed trading floors are here to stay. While sell-side traders will eventually make it back to the trading floor, banks are accepting that they will need to maintain partially-remote trading floors for the foreseeable future. Though triggered by the COVID-19 pandemic, this is just another step along the path away from trading pits and towards electronic communication and automation. Trading pits gave way to electronic trading, physically separating traders from different firms from each other. This further progressed within the firm as trading floors grew larger and global, leveraging technology to allow trading and sales to sit farther apart – sometimes in different offices. Although the driving cause today is different, traders, sales, support and operations staff within the same firm are forced to physically separate. Technology is filling the space in between. 

ISLA forms three new “broader” steering groups

The International Securities Lending Association (ISLA) has formed three new steering groups to address the regulatory, digital and associated market practice changes the industry is experiencing through the recent pandemic.ISLA runs a variety of working groups for its members, covering all aspects of advocacy, tax, legal, regulation and best practice in order to allow members to discuss challenges, debate issues, conceive ideas and seek solutions. 

Big banks give backing to Singapore Green Finance Centre

The Monetary Authority of Singapore and nine international banks have leant their weight to the establishment of a research institute dedicated to green finance research and talent development.The Singapore Green Finance Centre, run by Imperial College Business School and the Lee Kong Chian School of Business at Singapore Management University (SMU), will pursue research to help develop strategies for policy makers and financial institutions to support Asia’s transition to a low carbon future.

Bank of Japan preps CBDC experiments

The Bank of Japan will begin central bank digital currency (CBDC) experiments early next year but says it still does not yet have any plans to issue its own digital yen.Central banks around the world have been grappling for years with the pros and cons of creating their own digital currencies.

HSBC appointed securities services provider for HK ESG ETF

HSBC has been appointed as the as the full securities service provider by Haitong International Asset Management (HK) Limited for Haitong MSCI China A ESG ETF, the first broad-based environmental, social and governance exchange-traded fund listed on Hong Kong Stock Exchange. 

FSB: increase in suptech and regtech

The Financial Stability Board (FSB) has reported an increase in the use of regulatory technology (regtech) to help institutions meet their regulatory requirements and supervisory technology (suptech) to improve firm’s supervisory capabilities.In a report by the FSB, it explained that opportunities offered by both suptech and regtech have been created by a combination of factors that have come to the fore in recent years. 

UK’s FCA concludes first SSR enforcement against HK asset manager

The UK’s Financial Conduct Authority (FCA) has taken its first-ever enforcement action for a breach of the Short Selling Regulation (SSR).The market regulator has fined Hong Kong-based asset management firm Asia Research and Capital Management (ARCM), for failing to disclose its massive net short position in Premier Oil, a UK oil company, which it opened in February 2017 and built to 16.85 percent of issued share capital by July 2019. 

Retooling the NMS/SIP Market Data Universe

The SEC’s initiative to revamp the National Market System (NMS) data collection and distribution framework is both welcome and overdue (see SEC press release 2020-34). The time has come for firm action, to bring market data collection, distribution and pricing up to speed with today’s technology and practices on both Wall Street and Main Street. 

UK’s FCA concludes first SSR enforcement against Premier Oil short seller

The UK’s Financial Conduct Authority (FCA) has taken its first-ever enforcement action for a breach of the Short Selling Regulation (SSR).The market regulator has fined Hong Kong-based asset management firm Asia Research and Capital Management (ARCM), for failing to disclose its massive net short position in Premier Oil, a UK oil company, which it opened in February 2017 and built to 16.85 percent of issued share capital by July 2019. 

CFTC releases no-action letters offering further relief for clearing organisations during Libor transition

The Commodity Futures Trading Commission (CFTC) has published two additional no-action letters offering relief to derivatives clearing organisations (DCOs) transitioning to the secured overnight financing rate (SOFR).The no-action letters will offer swap transaction and pricing data reporting relief to DCOs that will help transition certain cleared swaps from discounting using the effective federal funds rate (EFFR) to the SOFR.

SFTR: Buy side start reporting

Buy-side members must begin reporting under the EU's Securities Financing Transactions Regulation (SFTR) from today as part of the third phase of implementation.SFTR reporting obligations now apply to investment funds, pension funds and (re-)insurance undertakings, which join sell-side firms, central counterparties and central securities depositories that began reporting in July. 

BMA grants operating licence to new crypto exchange operator

CrossTower, a new exchange operator, has been granted a license to operate in Bermuda by the Bermuda Monetary Authority (BMA) under the Digital Asset Business Act (DABA).The license provided is a “Class M”, which makes CrossTower one of the first major cryptocurrency exchanges to receive such a permit from the authority. 

London Stock Exchange Group makes plans for a no-deal Brexit

    LSEG’s pan-European equities trading venue Turquoise has released a contingency plan that will come into affect in the event of a no-deal Brexit. The stock exchange confirmed that European Economic Area (EEA) securities would be available for trading on its Dutch platform, the MTF operated by Turquoise Global Holdings Europe B.V, under the plan.

LCH SA to support the clearing of €87.4 billion of EU emergency SURE bonds

Central clearing counterparty (CCP) LCH SA will support the clearing of bonds issued as part of the European Union’s temporary support to mitigate unemployment risks in an emergency (SURE) programme.The bonds issued as part of the scheme will be eligible for clearing at LCH SA’s RepoClear service. LCH SA offers clearing of euro-denominated bonds and repos across 13 government bond markets. It will also support and clear the upcoming Next Generation EU Bonds. 

Reporting data integrity undermined by widespread LEI lapses

As much as 30 percent (500,000) of legal entity identifiers globally are out of date and in need of renewal, according to LEI Worldwide, a GLEIF-registration agent and LEI provider.LEIs are a 20-character alphanumeric code that, as the name suggests, allows regulators to identify individual counterparties in a transaction.They are currently required under several rules frameworks including the Securities Financing Transactions Regulation and the European Market Infrastructure Regulation, among others. 

TORA Expands OEMS Offering to Include Fixed Income

 TORA, the provider of industry leading trading technology, has today announced that it has expanded its multi-asset Order & Execution Management System (OEMS) trading platform to support fixed income.TORA’s OEMS now offers a range of proprietary tools to help traders access bond liquidity and to efficiently execute and manage bond orders across a broad range of sectors. With coverage across government, sovereign, supranationals, agency, investment grade corporate bonds, high yield, emerging markets, covered bonds and municipal bonds the new offering will appeal to global fixed income managers. This adds to existing coverage of fixed income futures, options and ETFs. 

Sibos 2020: Defining sustainable finance and ESG, beyond climate action and the environment

As wildfires, hurricanes, social and economic unrest and the pandemic play out across the global stage, the final of day of Sibos 2020 focuses on banking for humanity, the impact of ESG and the triple bottom line as a driver for sustainable business.

Regulators lose patience with Citi over risk management flaws

Federal regulators have slammed Citigroup for failing to correct deficiencies in enterprise-wide risk management, compliance risk management, data governance, and internal controls, hitting the bank with a $400 million fine and cease and desist order.

Study warns European Commission to learn from US when developing EU tape

Europe should learn lessons from the US when creating an EU consolidated tape, a study undertaken on behalf of the European Commission has concluded.Market Structure Partners, which conducted the report, recommended the Commission moves ahead with forming a post-trade EU tape for equity and debt markets with legislative changes to require the data to be consolidated in law. 

Bottomline and Dow Jones team up to tackle financial crime

Bottomline Technologies has partnered with Dow Jones Risk & Compliance to increase the protection of payments across the entire lifecycle.The new partnership adds keys data to Bottomline’s anti-money laundering and counter-terrorist financing monitoring and screening capabilities used to identify and eliminate illicit transactions. 

FCA sets coronavirus challenge for new sandbox applicants

The Financial Conduct Authority has opened its sandbox to new financial applications capable of tackling challenges caused by the coronavirus pandemic.Three key areas - preventing fraud and scams, supporting the financial resilience of vulnerable consumers, and improving access to finance for small and medium sized enterprises - have been identified as particular areas of importance for the FCA.

Fed prohibits large bank share repurchases and caps dividends for Q4 2020, ensuring ample...

Due to the continued economic uncertainty from the coronavirus response, the Federal Reserve Board on Wednesday announced it will extend for an additional quarter several measures to ensure that large banks maintain a high level of capital resilience. 

US politicians weigh response to OCC payments charters

With financial technology firms growing fast and big tech outfits increasingly moving into the FS sector, a senior US politician has warned about the risks of "too-big-to-fail" fintechs.In a hearing of the House of Representatives Task Force on Financial Technology, chair Congressman Stephen Lynch said: "Technology and tech companies are playing an ever-increasing role in our finances, and our laws and regulations are struggling, to be kind, to keep pace."
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