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Tag Archives: Basel

Treasury Report Calls for Sweeping Changes to Financial Rules Newsletter,Options

Observations & Insight Thaler, Famed for ‘Nudge’ Theory, Wins Nobel Economics Prize Jonas O Bergman – Bloomberg University of Chicago’s Richard H. Thaler, one of the founders of behavioral economics and finance, was awarded the 2017 Nobel Prize in Economics for shedding light on how human weaknesses such as a lack of rationality and self-control can ultimately affect markets. jlne.ws/2y7Wdre Lead Stories Treasury Report Calls for Sweeping Changes to Financial Rules Tiffany Hsu – NY Times The Trump administration is again taking aim at the Dodd-Frank Act, releasing a Treasury Department report on Friday that recommended a vast reworking of…

Equity volatility schemes seen widely used; Volatility risk endures; Laszlo Birinyi’s calls Newsletter,Options

Observations & Insight Crypto Developments of the Week – There Were a Lot Spencer Doar – JLN The news just won’t stop in the crypto space and with the big exchanges making moves, new platforms seemingly launched every day, ETFs trying to get off the ground and regulatory concerns, it is worth reviewing some of the week’s news. Most of the developments were setbacks. Reuters has an expose out today about how chaos and hackers stalk investors on cryptocurrency exchanges. Plus, there are ongoing concerns about about transaction and transfer costs in bitcoin as Bloomberg laid out in today’s Paying…

OCC chief Donohue latest to warn over Basel rules; Does a 263% Profit Mean Markets Are Efficient?; What History Says About Low Volatility Newsletter,Options

Observations & Insight June 2017 Options Exchange Marketshare via OCC ++++++ OCC Cleared Contract Volume Up Two Percent in June OCC OCC, the world’s largest equity derivatives clearing organization, announced today that cleared contract volume in June reached 387,597,223 contracts, a two percent increase from the June 2016 volume of 378,908,938 contracts. OCC’s year-to-date average daily cleared contract volume was also up two percent from 2016 with 17,174,603 contracts. Cleared futures volume was up 16 percent in June with 13,194,530 contracts, and securities lending CCP activity was up 27 percent over June 2016 with 1,142,708 new loan transactions. jlne.ws/2tiXQjn ++++++…

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…