Capital Markets Advisors

After the final version of the Volcker Rule was published in December, and banks began to prepare for the July 15, 2015 effective date, the only remaining question was how it will be enforced. That enforcement is up to the examiners of the various agencies. Recently, the Office of the Comptroller of the Currency (OCC) published a 26-page VR examiners’ manual, which may be an inside peek into how the… Read More »

It has been more than two years since the proposed Volcker Rule (VR) was published by a consortium of US regulators. With not much being said publicly about it over the ensuing period, and all the public attention paid to derivatives reform worldwide, one might be forgiven if one took one’s eye off that particular ball. As it turns out, that would have been a mistake. In a recent article… Read More »

In my last piece, I discussed the general compliance requirements of the Volcker Rule (VR) as it was proposed in 2011. This is now timely because the Secretary of the Treasury apparently told a group of bankers recently that the final rule would be published before the end of the year. Although there may be some adjustments to the proposed requirements, we should expect the basics to remain, and that… Read More »

In my last piece, I discussed the exemption-specific compliance requirements of the Volcker Rule (VR) that are common to all, or most, of the exemptions. In this article I will discuss two specific exemptions and their requirements: liquidity management and underwriting.

In my last piece, I discussed the exemption-specific compliance requirements of the Volcker Rule (VR) for liquidity management and underwriting. In this article, I will focus on market-making and hedging. All together, now – the operative language of the Act is, “Except as otherwise provided in this subpart, a [bank] may not engage in proprietary trading, and further defines the term; proprietary trading means engaging as principal for the trading… Read More »

May 12th, 2014 The CFTC issued on May 1 deadlines for the implementation of made‐available‐to‐trade requirements for packaged swaps transactions, dashing dealers’ hopes for permanent relief from the mandate. The new rules will demand changes in the relationships between dealers and customers.

A recent article in the Wall Street Journal predicted that the looming “Volcker Rule Won’t Allow Banks to Use ‘Portfolio Hedging.’” This subject has been discussed and re-discussed for a while, but much of the discussion, and perhaps the rule itself, appears to misunderstand the very nature of hedging.

As we get closer and closer to mandated SEF trading, we keep finding little things that don’t work quite the way they are supposed to. I covered some of these in previous articles, including one just yesterday. Well, it seems that the CFTC can’t get out of its own way, or ours for that matter. The latest “clarification” from them relates to impartial access to SEF, and covers something called… Read More »

As derivatives reform spreads out from Washington to places like Europe, some of the subtle, and not so subtle, differences in regulation are starting to make waves, if not tsunamis. One of the biggest areas of change is the clearing of derivatives contracts, and one of the most interesting, if not troubling, developments is EMIR’s rules allowing indirect clearing.

By any objective criteria, swaps trade reporting has had an inauspicious start. In the US, where it has been in effect for over a year, the CFTC, which oversees reporting and repositories, has recognized that it isn’t working very well.  Commissioner Scott O’Malia has spoken publicly about the reporting problems, and the Commission recently kicked off an initiative to revamp the whole US trade reporting process.