One Small Step for Esma
![james-rundle-waters james-rundle-waters](/sites/default/files/styles/landscape_750_463/public/import/IMG/283/261283/james-rundle-waters.jpg.webp?h=4a6b0616&itok=EjSrsvc6)
Indeed, Europe is getting far closer to achieving Group-of-20 (G20) mandates, albeit a little later than might have originally been envisaged in Pittsburgh. The US, too, is forging ahead with its own narrative. Credit where credit is due, lawmakers on both sides of the Atlantic have put together an incredible volume of new legislation in a relatively short period of time. The G20's demands may have seemed relatively straightforward when first agreed upon, but in actual practice, they required a wholesale overhaul of the way markets worked.
For the European Market Infrastructure Regulation (Emir), perhaps the most important part of the toolkit in Europe for derivatives, Maijoor said that the technical work was 80-percent complete. In the US, while officially, electronic trading of derivatives is in full swing, there are still numerous exceptions and fierce debate over key areas such as packaged transactions. Reporting is largely in place for both regions, but the clearinghouse issue is causing a headache for Esma and others.
Only four out of twenty central counterparty clearinghouses (CCPs) that applied have been authorized, although Maijoor said that he expects this number to increase. Still, you can't help but feel there's a little concentration risk in that number. Also, the two remaining areas of Emir technical standards to be defined are pretty crucial ─ which products should go into central clearing, and what level of margin should be posted for those that don't.
You can read more about Maijoor's speech here.
Outsourced Surveillance?
Other items of coverage this week included Trapets AB's announcement of its Outsourced Market Surveillance product, the acronym for which shouldn't be confused with the same three-letter abbreviation for order management system. Now, Trapets has been quietly building its strength for a while, first hiring Burgundy's head of market surveillance, Peter Nylén, away last year, landing a deal with the Dhaka Stock Exchange in February, and then casually dropping this service on the market last week.
Only four out of twenty central counterparty clearinghouses (CCPs) that applied have been authorized, although Maijoor said that he expects this number to increase.
The surveillance offering will be overseen by Nylén from Stockholm, and come in two flavours ─ one where suspicious transaction reports are automatically filed with the regulator, and one where they're sent back to the firm for the final decision.
This has plus and minus sides, in my view. On the one part, the likely cost reduction, not needing to buy complicated surveillance platforms and, let's say it again, cost reduction will be key points for resource-constrained operations. On the other hand, not having the primary surveillance operation in-house, with compliance officers familiar with the trade flow of a company and the behavior of its traders, seems like food for thought.
If you've come to this Editor's Letter through the website, remember that you can sign up for Sell-Side Technology's weekly digest for free, which is delivered at 2pm GMT/BST or 9am EST/EDT every Monday.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
Bloomberg, industry bodies push back on Cboe’s proposed OEMS rule change
Some industry bodies disagree with the options exchange’s proposal to carve its Silexx OEMS out of the SEC’s definition of an exchange facility and place it into a separate business line.
Zeros and ones: Industry contemplates T+0 as the next step
With the North American transition to T+1 settlement complete, same-day settlement could be the next goalpost set, though skeptics are many.
The IMD Wrap: Déjà vu as exchange data industry weighs its options
Max highlights some of WatersTechnology’s recent reporting on data costs and capacity issues facing the options industry, and asks, haven’t we seen this before somewhere?
FRTB data quality issues persist amid shifting implementation dates
Banks are finding market and reference data challenges posed by the FRTB’s standardized model tricky, compounded by uncertainty over when the regulation will take effect.
Cboe pushes rule change to make way for proprietary Opra alternatives
As US options data has grown in volume and cost, Cboe says changing the public feed's governing document would make way for more competition from private alternatives, including its Cboe One Options Feed, launched in 2023.
Regulators urged to promote cyber security investment
Public interest in stopping cyber attacks that could trigger bank runs, says Bundesbank researcher
Hong Kong looks for digital response to trade reporting burden
New swaps reporting framework will include more fields than requirements in US or Singapore.
Big questions remain over Dora’s critical third parties
Industry looks for clarity on critical third parties ahead of July 17 regulatory technical standards for the EU’s Digital Operational Resilience Act.
Most read
- IEX Cloud closure forces fintech clients to seek data alternatives
- Zeros and ones: Industry contemplates T+0 as the next step
- Natixis refines in-house interoperability model