Financial Regulatory Forum

By Huw Jones

LONDON, Sept 15 (Reuters) – Differences between new European Union and U.S. rules to crackdown on derivatives will be a key test of how well transatlantic regulators can coordinate to iron out loopholes banks may be tempted to exploit.

The United States has already approved a law to tighten supervision of the $615 trillion off-exchange derivatives markets and the EU published its own draft law on Wednesday.

Both implement pledges the EU and United States made as members of the Group of 20 countries (G20) to require central clearing of as many contracts as possible, reporting of trades to repositories and where appropriate, trading on an exchange.

“The crunch item to get right is for trade repositories to make sure every regulator has access to all the data they have,” said Damian Carolan, a partner at Allen & Overy law firm.

“I don’t think there are any massive showstopper obstacles and there is enough recognition for third country solutions,” Carolan added.

By Huw Jones

LONDON, May 18 (Reuters) – LCH.Clearnet moved to reassure markets on Tuesday that its capital base was adequate despite a ratings downgrade at a time when regulators are finalising laws to force banks to clear vast numbers of derivatives.

Standard & Poor’s placed LCH.Clearnet’s rating on “negative credit watch” last week after one of its biggest customers, the transatlantic exchange NYSE Euronext said it would stop using the Anglo-French clearer from late 2012.

“The clearing activity itself is not dependent upon the creditworthiness of the clearing house,” LCH.Clearnet Chief Executive Roger Liddell told an industry conference.

   WASHINGTON, Nov 4 (Reuters) – The chairman of the U.S. House Financial Services Committee is seeking changes to draft legislation for the $450 trillion privately-traded derivatives markets, with the intent of making it harder for banks to avoid trading the contracts on exchanges.

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By Kim Dixon and Karen Brettell
WASHINGTON/NEW YORK, Nov 3 (Reuters) – U.S. regulators should be given authority to determine whether a privately traded derivative contract should be cleared through a central clearinghouse, the chairman of the House Financial Services Committee said on Tuesday.

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    By Huw Jones
   LONDON, Sept 13 (Reuters) – Central clearing of privately traded derivatives contracts won’t be enough to make the $600 trillion sector safe, while clearing of some bespoke trades may not be desirable, the Bank of International Settlements said. (more…)