Entries tagged “Dodd-Frank”
Insight Robin Powers · June 28, 2011
India and U.S. Discuss Financial Reform
U.S. Treasury Secretary Timothy Geithner held meetings in Washington yesterday and today with India’s Finance Minister Pranab Mukherjee in the second round of Economic Partnership talks between the two countries. During these meeting, Geithner, Mukherjee, and other attendees discussed some of the “financial sector reforms,” in an effort to bridge the economies of two large nations and work toward a consistent (if not uniform) approach to regulation. "Our interests are pretty complementary as a whole," Geithner explained.
Insight Robin Powers · June 27, 2011
Asia On Par with U.S. OTC Derivative Reform
As previously reported (on Day 25 of this countdown), Mary Schapiro, SEC Chairperson testified before the House Financial Services Committee on June 16, 2011 regarding "Financial Regulatory Reform: The International Context." In her remarks, Schapiro noted that the G20 agreement contemplates that every G20 country will have completed the legislation, rulemaking and implementation of these reforms by the 2012 deadline. She pointed out that while progress is being made internationally, only Japan has enacted OTC derivatives reform legislation since the September 2009 G20 Communiqué, and its legislation only covers clearing and reporting, not mandatory trading.
Japan is relatively advanced in this regard with regulation requiring many domestic OTC derivatives to be cleared, a trend which is happening generally in Asia more quickly than in the U.S. or in Europe. In addition to central clearing requirements, Japan significantly reinforced OTC derivatives regulation in April of this year. The government amended the regulations under the Financial Instruments and Exchange Act (FIEA) and tightened the rules relating to the marketing of derivatives transactions and structured products by the financial services sector.
Insight Robin Powers · June 26, 2011
Australia Contemplates New (but Limited) Derivative Market Reforms
Australia is moving closer to fulfilling its G20 pledge to decrease systemic risk in the OTC derivatives market by implementing national regulation. Last week, Australia's Council of Financial Regulators (the Council) released a discussion paper about what those regulations may look like.
While the Australian OTC market is significant, with more than US$100 billion traded daily, it is a small piece of the estimated US$600 trillion worldwide OTC derivative market. Accordingly, the Council suggested that Australia should take a more judicious approach than its U.S. colleagues did with Dodd-Frank. The Council explained that, “In practice, the only OTC derivatives products traded in the Australian market that might currently meet the tests of systemic risk reduction, clearing viability and global harmonization, are interest rate derivatives and some foreign exchange derivatives, namely forex options.” The Council concluded that “it is likely that there would be some scope for central clearing of at least some of this activity.”
Insight Robin Powers · June 25, 2011
Federal Reserve Board Aids in Implementing Title VII
The Federal Reserve Board is taking seriously its share of responsibility under the Dodd-Frank Act. Michael Gibson, the Senior Associate Director of the Division of Research and Statistics on the Federal Reserve Board spoke before members of Congress last week (June 15, 2011) to communicate the Board’s views on implementing Title VII.
Gibson began his speech by stating that the Board has gathered its most qualified members across the Federal Reserve System and has enacted a system to comment on the proposed rules sent down by the various commissions (SEC and CFTC). The Board has also been facilitating the efforts across the G20 countries so that a comprehensive global system for trading OTC derivatives will allow fair competition among markets. Members of the Board also help facilitate among those working on the Basel III legislation in the U.K.
Insight Robin Powers · June 24, 2011
Canadian Entities Aim for OTC Derivatives Regulation
Though Canada represented only $9 trillion of the $600 trillion OTC derivatives market last year, Canadian investors were not exempt from the fury of the recent market meltdown. In 2007, Canadian investors involved in the asset-backed commercial paper market suffered losses of $35 billion. But, losses notwithstanding, our northerly neighbors have only recently begun to discuss their intentions with respect to regulating the OTC derivatives market.
Yesterday, Canada’s securities commissions issued a proposal to require that OTC derivative transactions be reported through trade repositories that meet international standards. Kevin Fine, the director of the derivatives branch at the Ontario Securities Commission (OSC), said trade repositories were the first target of the securities regulators because they will do the most to expose market risk and irregularities.
Insight Robin Powers · June 23, 2011
SEC Provides Guidance and Temporary Relief Regarding Security-Based Swap Provisions of Dodd-Frank Act
The SEC today issued guidance as to whichTitle VII requirements will apply to security-based swap transactions when Dodd-Frank goes into effect. It also granted temporary relief to market participants from compliance with most of the new Exchange Act requirements that would otherwise apply on July 16th.
Insight Robin Powers · June 22, 2011
The Status of Regulation in the European Union
With Dodd-Frank taking effect in less than a month, officials on both sides of the Atlantic have been pressuring one another to implement stricter financial regulations, while equivocating on the regulations that they are willing to accept at home. Michel Barnier, European Commissioner for Internal Market and Services recently explained to well-known think tank the Brookings Institute that the E.U.’s failure to adopt measures similar to Dodd-Frank stemmed from a belief that the U.S. will not follow through on implementing stricter financial regulations. Barnier stated, “you will understand that Europe cannot be naïve. And will not be naïve. Equality and reciprocity are not only justified. They are also necessary.”
Insight Robin Powers · June 21, 2011
Testimony by Mary Schapiro on Financial Regulatory Reform: The International Context
In testimony before the House Financial Services Committee, SEC Chair Mary Schapiro noted that the US regulators have consulted, and will continue to consult with, international securities regulators that are considering OTC derivatives market reforms. Schapiro explained that because the OTC derivative marketplace already exists as a functioning global market with limited oversight or regulation, international coordination is needed to limit opportunities for cross-border regulatory arbitrage and competitive disadvantages, and to address unnecessarily duplicative and conflicting regulations. The overall goal is to reduce systemic risks, increase transparency, and improve the integrity of the OTC derivatives marketplace, while mindful of the potential effects on efficiency and liquidity.
Insight Robin Powers · June 16, 2011
A Dodd-Frank Overview
According to the U.S. Securities and Exchange Commission (SEC), “Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) addresses the gap in U.S. financial regulation of OTC swaps by providing a comprehensive framework for the regulation of the OTC swaps markets.” Dodd-Frank goes into effect July 16, 2011 (360 days after it was passed), with the SEC and the Commodity Futures Trading Commission (CFTC) promulgating and implementing the supporting rules and regulations.
Insight Robin Powers · March 18, 2011
The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) continue to issue regulations implementing the OTC derivatives provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). In a Q&A, Robin Powers of the Rimon Law Group discusses Title VII of Dodd-Frank and its impact on margin/collateral posed by End-Users.