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Tag Archives: Basel

Liquidity Providers Unduly Penalized By Capital Rules: CTC’s Crutchfield Exchanges, OTC & Clearing,Interview,Options,Video,video

Financial Reform Objectives at Odds with Effects of Rules What’s a market maker to do when it can’t warehouse risk? The options industry has a problem with bank capital rules. In this JLN video, Steve Crutchfield, head of market structure with CTC, discusses the burdens placed on market makers due to rules that are out of touch with the stated goals of post-crisis reforms, as well as structural issues within options markets.    There are only three major banks with a significant footprint in clearing for options market making firms. Those banks’ ability to conduct that business is under pressure…

BoE told to firm up oversight of clearing and other support; Biggest banks each set to be hit with $200m trading rule costs; Smaller companies fear threat from new financial regulation John Lothian Newsletter,Newsletter

First Read New CEO, Updated Offices By John J. Lothian, Executive Chairman Today is the first day in the reign of Jim Kharouf as king….err… CEO of John J. Lothian & Company, Inc. He takes command in our newly updated offices in the CBOT Building, which are not quite done yet. Friday we learned we had an unresolved heating and air conditioning situation that needed to be resolved. We will begin to move in the office this afternoon and hope the work is done by tomorrow. In the new game of thrones, Jim will now sit on the iron hot…

LSE sells French clearing unit to Euronext for EUR510m; Basel postpones bank reform vote amid policy differences; Anshu Jain to Join Cantor Fitzgerald as President John Lothian Newsletter,Newsletter

First Read Ringing In New Year’s Resolutions Jim Kharouf, JLN Some years are more important than others. The trick is guessing what’s going to happen ahead of those. Welcome to 2017, the year of Trump, the true start of Brexit, the end of the trading floors in some places and the beginning of a new one in Chicago at the Boston Options Exchange. It will be a year for regulatory change – again, with a new administration in the White House. It could be a year of extreme volatility due to the geopolitical landscape around the world, but we’ve heard…

A Basel netting issue: Pushing for less burdensome capital requirements in the options market Exchanges, OTC & Clearing,Feature,Mwiki,Options,Regulation,Regulation & Enforcement

The unintended consequences of financial regulation have been seeping into the markets since the first rule was made in the wake of the financial crisis. One prime example is the leverage ratio, which determines the required capital of general clearing members. The actual calculation of the capital requirement within the Basel III leverage ratio framework is a particular sticking point for the OCC. Right now, the Current Exposure Method (CEM) is used in the calculation, whereas the OCC and a wide swath of industry participants believe that the Standardised Approach for Counterparty Credit Risk (SA-CCR) would better encapsulate the nature…

FIA’s Walt Lukken on Reg AT and the 2016 Agenda Blog,Regulation,Video

Walt Lukken, president and CEO of the FIA, spoke with JLN about what is in store for the rest of the year at the trade organization. The FIA has been coordinating with 10 working groups on what upcoming rules about automated trading (Reg AT) should look like for the futures industry. Lukken said that the FIA believes it would be best to break Reg AT into two more manageable parts.  The first portion would focus on getting pre-trade risk controls up to snuff, and the second part would delve into the more contentious parts of Reg AT, such as definitions…