A collection of stories from SmartBrief publications and around the web…

It has been a week of regulatory relief in the world of finance. The Basel Committee on Banking Supervision kicked things off by proposing a new method for banks to assess their exposure to derivatives. The new method may reduce the amount of capital banks need to meet restrictions on leverage.

The Labor Department followed suit with a less-aggressive-than-previously-mooted fiduciary rule. It might seem strange that the DoL back-pedaled a bit during a year that has seen so much rancor on the campaign trail directed at the financial services industry, but lobbying money talks on Capitol Hill and it appears the DoL went with a rule it thought might actually achieve some additional protection for consumers and not get thrashed by lawmakers.

A couple random thoughts on the DoL’s final fiduciary rule:

  1. The rule still allows for firms to sell relatively expensive in-house “proprietary” products to clients.
  2. (read more…)

Happy St. Paddy’s Day from sunny and warm FIA Boca!

Exchange M&A continued to be the hot topic yesterday. While none of the executives could comment on the deal announced by Deutsche Boerse and London Stock Exchange Group, that didn’t stop everyone else from chatting about the deal. The swell of rumors seemed to lean toward the deal not being finalized before Jeff Sprecher and the crew at ICE have a say in the matter.

The one thing about rumored M&A moves that seems to be missing from all the scuttlebutt is any mention of anti-trust concerns. Perhaps the Boca crowd is a wee bit overconfident about any potential deal getting a easy approval from anti-trust authorities?

CFTC Chairman Timothy Massad delivered his keynote and also spent time on the sidelines of the conference assuring industry participants that the Commission would adequately safeguard the algorithmic trading secret sauce it intends to collect from trading firms. (read more…)

For the astute listener, second- and third-order effects were the golden nuggets of information that could be gleaned from the presentation of CME Group Chief Economist Blu Putnam this week at the 41st Annual International Futures Industry Conference in Boca Raton, Fla. Putnam’s high-level perspective on the 2016 outlook for the global economy was overall strong, but he noted differentiators in the data, which could be of concern going forward.

The futures market dynamics in east Asia are not only volatile, but spread across multiple sectors. Whether it be iron ore, copper, or oil, Chinese markets are not expected to take on heavy volatility in these sector without problems.However, Putnam noted that all of those commodities seemed to be bouncing off of their lows (see chart). (read more…)

Nasdaq Futures has garnered support across all energy sectors since launching last July. In all, 7 million-plus contracts have been traded on the market, offering futures and options across key energy benchmarks. Volume growth and open interest has remained consistently above 20%.

Open interest has reached 700,000 contracts, again underscoring consistent support from market participants, including both hedgers and traders. Nasdaq Futures is consistently above the 10% mark in gasoil and has repeatedly registered a market share in excess of 20% in natural gas options.

“Since inception, Nasdaq Futures has focused on building robust liquidity in the core energy products, with specific strength in gasoil and natural gas options,” said CEO Magnus Haglind. “This growth momentum highlights the value of Nasdaq Futures for customers. As we know, cost-efficiency is an important factor for our clients, based in part on the recent challenges in the underlying commodities markets. We remain dedicated to providing customers with value added pricing and an innovative clearing platform, and we are encouraged by the support from a wide variety of market participants.”

Nasdaq Futures’ 17 Futures Commission Merchants worldwide provide easy market access to energy markets. (read more…)

CME Group will integrate truePTS processing capabilities into CME Group’s network of regulated trade repositories under an agreement announced Wednesday at the 41st Annual International Futures Industry Conference in Boca Raton, Fla. Incorporating these capabilities enables truePTS to provide a single trade reporting application program interface to conform with obligations in the US, EU, Australia, Canada, Singapore, Hong Kong and Japan.

“CME Group is committed to developing innovative solutions with leading partners to meet industry participants’ needs,” said CME Group’s Jonathan Thursby. “By tightly integrating our services with truePTS, we are now poised to more rapidly deliver tangible cost savings to customers worldwide, as well as promote greater efficiency and better tools to manage compliance within our industry.”

The agreement also simplifies global reporting through the integration of pre- and post-trade submission services. The streamlining will create significant cost savings when it comes to regulatory submissions to broker-dealers, inter-dealer brokers, central counterparty clearinghouses, and asset managers. (read more…)