Financial Regulatory Forum

JPMorgan may tip Wall Street’s hand on ploys to beat Volcker

By Rachel Wolcott

NEW YORK, May 14 (Thomson Reuters Accelus) - JPMorgan Chase & Co’s revelation that it had trading losses of at least $2 billion on a failed hedging strategy may have tipped the hand to one way Wall Street executives plan to get around the Volcker Rule.

The incident shows how firms could use the pending rule’s hedging exemption to do proprietary trades and still technically be compliant with Volcker. It could allow firms to keep some proprietary trading desks, but portray them to regulators as something else, such as portfolio hedging. (more…)

COLUMN – Rogue traders, delta trading and exchange-traded funds

By Helen Parry, the views expressed are her own.

LONDON, Oct. 7 (Thomson Reuters Accelus) - There are many common features in cases of rogue or unauthorised trading, including the use by ostensibly riskless arbitrage traders of fictitious trades on internal systems to mask their unhedged positions. One obvious feature that is present in many rogue trader cases has been a failure in trade confirmation systems and controls. This feature frequently appears conterminously with the fact that a trader has intimate knowledge of and/or power and influence over middle and back office systems. (more…)

S.Korea to restrict FX borrowing, excessive hedging

A South Korean bank clerk shows new 5,000-won ($4.93) bank notes at the headquarters of Woori Bank in Seoul January 2, 2006. The Bank of Korea begun to distribute on Monday the new 5,000-won bank notes, the second-highest denomination in the country's currency, which is aimed to prevent counterfeiting and forgery attempts for public use, local media reported. REUTERS/Kim Kyung-Hoon    Sept 25 (Reuters) – South Korea is discussing measures to crack down on excessive foreign-currency borrowing by banks, Chin Dong-soo, chairman of the Financial Services Commission, said.
   The timing of the proposed measures may be flexible, depending on decisions on global standards by the Financial Stability Board, the G20′s regulation coordination arm, he said. (more…)

INTERVIEW – CME proposes energy position limits

Craig Donohue, the chief executive of CME Group, speaks during The Globalization of Capitol Markets: The Rise of New Financial Centers panel at the 2008 Milken Institute Global Conference in Beverly Hills, California April 28, 2008. REUTERS/Phil McCarten (UNITED STATES) NEW YORK, Sept 16 (Reuters) – CME Group, the giant Chicago-based operator of derivatives exchanges, would impose new position limits on NYMEX energy contracts in response to a push by U.S. regulators for renewed scrutiny in energy trading, CEO Craig Donohue said in an interview Wednesday.
CME would apply the limits, laid out in a CME White Paper released Wednesday, as long as regulators agree to enforce limits in venues where commodities are traded around the world, and extend them to include over-the-counter commodities swap contracts as well, Donohue said.

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LME, ICE say no plans to detail non-commercial positions

By Pratima Desai
LONDON, July 29 (Reuters) – The London Metal Exchange and Intercontinental Exchange said on Wednesday they had no plans to publish details on speculative positions on their contracts, despite controversy about some recent holdings at LME.

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