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Newedge Starts OTC Interest Rate Swap Product Clearing with International Derivatives Clearinghouse
March 10, 2010--ewedge USA,
LLC, a global leader in multi-asset brokerage and clearing, and the
International Derivatives Clearing Group, LLC (IDCG) announced today
that Newedge has finalized its membership with the International
Derivatives Clearinghouse LLC (IDCH), a derivatives clearing
organization regulated by the U.S. Commodity Futures Trading Commission
(CFTC).
With this membership, Newedge can offer central counterparty clearing
of Interest Rate Swap products (IRS), the largest of the OTC derivative
markets with an over $400 trillion notional amount outstanding*.
Interest rate swaps are an important financial risk management tool for
corporations and investors worldwide.
Newedge clients and their swap market makers can continue to execute interest rate swaps in the well-established OTC market. Then, counterparties can reduce counterparty risk by simultaneously novating their positions to IDCH, with Newedge as their clearing firm. Counterparties will benefit from the clearinghouse performance guarantee and the proven segregated funds protections of the U.S. futures market.
"We've seen considerable demand from buy-side clients and liquidity providers for the clearing service we can offer via IDCG's structure," said Nicolas Breteau, Newedge's Global Head of Sales and Front Office. "In addition, compared to the incumbent bi-lateral exposure model, we believe there is potential for considerable cost savings and risk reduction for market participants using central clearing through Newedge and IDCH."
"Furthermore, the opportunity for clearing IRS at Newedge is an important enhancement to our leading position in the execution and clearing of listed derivative products. Newedge can provide clients with a central clearing platform supporting both interest rate swaps and interest rate futures, which are often employed complementarily by our clients," added Breteau.
Garry N. O'Connor, Chief Executive Officer of IDCG, said, "We are excited to have Newedge as a member of IDCH. Newedge, with its knowledge of the marketplace and established client relationships, gives us a solid partner to continue building this business, while offering the market the transparency, normalized valuation data, and risk mitigation necessary for interest rate swaps."
IDCG is an independently operated, majority owned subsidiary of The NASDAQ OMX Group. Inc. (NDAQ).
* According the Bank of International Settlements, globally, interest
rate swaps net asset outstanding were over $400 trillion as of June
2009.
Source: International Derivatives Clearing Group
China: US assets should not be ‘politicized’
March 10, 2010--An official in charge of China’s foreign reserves tried to ease American concern on Tuesday about the political impact of its huge holdings of US government debt and indicated Beijing has no plans for a big increase in its gold stockpile.
“This is a purely market-driven investment behavior. I would hope not to see this matter politicized,” the chief foreign exchange regulator, Yi Gang, said at a news conference. He was responding to a question about concerns among some American lawmakers that Beijing’s holdings of US debt pose a political threat to the United States. “China is a responsible investor and we fully believe such investments can be mutually beneficial,” Yi said.
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Source: Todays Zaman
Pimco files with the SEC
March 5, 2010--Pimco has filed a prospectus with the SEC for the following
PIMCO 0-3 Year Banking Sector Corporate Bond Index Fund
PIMCO 1-5 Year High Yield Corporate Bond Index Fund
PIMCO Emerging Markets Aggregate U.S.$ Denominated Bond Index Fund
PIMCO High Yield Corporate Bond Index Fund
PIMCO Investment Grade Corporate Bond Index Fund
view filing
Source: SEC.gov
Wisdom Tree files with the SEC
March 10, 2010--Wisdom Tree has filed a prospectus with the SEC for
WisdomTree Emerging Markets Local Debt Fund. The fund is an actively managed exchange-traded fund (“ETF”).
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Source: SEC.gov
J.P. Morgan Investment Management files with SEC
March 10, 2010--J.P. Morgan Investment Management has filed for exemptive relief from the SEC.
view filing
Source: SEC.gov
JP Morgan Investment Manager files with the SEC
March 9, 2010--JP Morgan has filed a request for exemptive relief for actively managed ETFs.
view filing
Source: SEC.gov
Chief Economist James Overdahl to Leave SEC
March 9, 2010--The Securities and Exchange Commission announced today that Chief Economist James A. Overdahl will leave the agency to rejoin the private sector after serving since July 2007 as principal economic advisor to the Commission on policy, rulemaking, and litigation support.
As Director of the Commission's Office of Economic Analysis, Mr. Overdahl supervised the agency's economics program, advising policymakers on a wide variety of topics affecting securities markets including the role of securities lending and short selling, market structure issues, money market mutual funds, credit rating agencies, and litigation matters. The Office of Economic Analysis is part of the SEC's new Division of Risk, Strategy, and Financial Innovation.
"Given the importance of rigorous economic analysis to the Commission, we truly appreciate Jim's dedication and his many contributions during a time of extraordinary challenges in our financial markets," said SEC Chairman Mary L. Schapiro.
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Source: SEC.gov
Testimony of Chairman Gary GenslerGensler Before the Senate Committee on Energy and Natural Resources
March 9, 2010--Good afternoon Chairman Bingaman, Ranking Member Murkowski and members of the Committee. Thank you for inviting me to testify regarding the regulation of over-the-counter (OTC) derivatives, particularly with respect to energy markets. I am pleased to testify on behalf of the Commodity Futures Trading Commission.
The 2008 financial crisis left us with many lessons and many challenges to tackle. Though there were certainly many causes of the crisis, I think most would agree that the unregulated OTC derivatives marketplace played a central role. We must now bring comprehensive regulatory reform to the OTC marketplace for derivatives.
CFTC Regulatory Regime
Before I discuss the details of much-needed OTC derivatives reform, let me take a moment to discuss the Commodity Futures Trading Commission’s (CFTC) current oversight of particular derivatives markets, called futures markets. Futures have traded since the Civil War, when grain merchants came together to hedge the risk of changes in the price of corn, wheat and other grains on a central exchange. It took nearly 60 years until Congress first brought Federal regulation to the futures markets. President Roosevelt and Congress further responded to our last great financial crisis by strengthening regulation and oversight of the commodities and futures markets through the Commodity Exchange Act (CEA), which created the CFTC’s predecessor within the Agriculture Department.
The CFTC ensures that futures and commodity options exchanges protect market participants and promote fair and orderly trading, free from fraud, manipulation and other abuses. Exchanges are where buyers and sellers meet and enter into transactions. The CFTC also oversees clearinghouses, which enter the picture only after two counterparties complete a transaction. Clearinghouses act as middlemen between and guarantee the obligations of the two parties to the trade and take on the risk that one party may fail to meet its obligations for the duration of the contract. Centralized clearing has helped lower risk to the markets for more than a century, in both calm markets and in the stormiest of markets, such as during the 2008 financial crisis.
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Source: CFTC.gov
FFCM, LLC files with the SEC
March 9, 2010--FFCM, LLC and FQF Trust have filed an amended application for exemptive relief.
view filing
Source: SEC.gov
Regulators tell US banks to hold funds
March 9, 2010--US regulators have told banks not to increase dividends or buy back shares until political and economic uncertainty surrounding the industry dissipates, in a move that will delay by months the return of capital to shareholders.
Some investors in financial stocks argue that winners of the credit crisis, such as JPMorgan Chase and Goldman Sachs, have profitable businesses and strong balance sheets and should consider raising dividends or buying back stocks
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Source: FT.com