Equity derivatives clearing approach: Severe consequences?

Exchange Shorts

  • Commodity Futures Trading Commission reopened public comment on its position limits rule proposed in 2013, the Financial Times reported. 
  • European Securities and Markets Authority proposed equity derivatives clearing approach is being criticized as insufficiently granular and could have severe consequences for the derivatives market by dragging illiquid and highly-tailored contracts into central party clearing. According to International Swaps and Derivatives Association research, ESMA’s approach does not recognize the key differences between types of instruments and is not consistent with the complex nature of the equity derivatives landscape.
  • Shanghai Futures Exchange plans to extend a pilot program for crude oil futures, part of a plan to give China a key participating role in global oil pricing, as well as to rival London and U.S. benchmarks, IFR reported. 
  • Chi-X Australia halted equity trading as a result of a technical fault on Monday, Bloomberg reported. Trading is expected to start as normal on Tuesday morning. 
  • Bank of England will increase lending access to the shadow banking sector, the Financial Times reported. According to BoE governor Mark Carney, “just as there will be times when central banks must backstop the banking system, there are also times when they should backstop core markets in a way that supports their contribution to the real economy but doesn’t encourage excessive risk taking. 
  • Markit integrated realtime trade date into its derivatives service, and institutional money managers can now get their portfolios updated automatically using realtime trade data.


About the Author

Bernardo Mariano brings to ERDesk his experience structuring private deals for the acquisition of mutual exchanges. Prior to joining ERDesk Bernardo worked as a Director for Instinet and later, CEO of Reuters' Bondex. He holds an MS in Economics from University of Illinois and an MIA in Finance from Columbia University. He can be reaced at be reached at mariano@erdesk.com. 

Equity Research Desk (www.erdesk.com) provides fundamental analysis of global capital markets related entities to support the investment process of buy-side analysts at hedge funds and traditional money managers. The company focuses its coverage on securities exchanges, discount brokers, trading platforms, asset managers, financial-related technology companies and intellectual property assets in the US, Europe, Asia, and Latin America.

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