Capital Markets Advisors

June 18th, 2014: Global derivatives regulation is a disaster, suggests George Bollenbacher, associate partner, Capital Markets Advisors, because the G-20 left it to each country to govern its own path to reform. And regulators dropped the ball from the start with reporting, which should have played a major role in delivering global transparency to the opaque market. Bollenbacher and TABB Group analyst Colby Jenkins examine the disparate reporting requirements in… Read More »

Michael Zimits on Systematically Important Financial Institutions (SIFI) April 24, 2012: “The FSOC will ask for how non-exchange traded securities are valued, which includes the pricing models and inputs as well as an audit trail proving the source of the data. Knowing that the data is accurate will also go a long way to proving that any risk metrics you have offered are valid before you come up with the… Read More »

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 »