The Law and Regulation of Central Counterparties


Author: Jiabin Huang
Publisher: Bloomsbury Publishing
ISBN: 1847316093
Category: Law
Page: 225
View: 1807

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The Law and Regulation of Central Counterparties provides a detailed analysis of the legal and regulatory aspects of Central Counterparties (CCPs) with an introduction to their role and functions in modern financial markets. The book begins by describing in detail basic elements of modern post-trade infrastructure, exploring the modern functional and operational aspects of CCPs in the markets. It moves on to discuss the relationships between CCPs and their members, and clients of clearing members as non-members, legal issues concerning collateralisation, netting and set-off, and default arrangements that are primarily embedded in the form of the rules and regulations of CCPs. With regard to regulatory issues, the book examines the regulatory framework with reference to the UK and the EU. As to the case for a single CCP for various different types of markets, the analysis covers the advantages and disadvantages of CCP clearing and carries out an assessment of the risks and benefits of a single multi-market CCP.

Regulation and Supervision of the OTC Derivatives Market


Author: Ligia Catherine Arias-Barrera
Publisher: Routledge
ISBN: 1351797719
Category: Business & Economics
Page: 280
View: 7527

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The over-the-counter (OTC) derivatives market has captured the attention of regulators after the Global Financial Crisis due to the risk it poses to financial stability. Under the post-crisis regulatory reform the concentration of business, and risks, among a few major players is changed by the concentration of a large portion of transactions in the new market infrastructures, the Central Counterparties (CCPs). ? This book, for the first time, analyses the regulatory response of the United Kingdom and the United States, the two?largest centres of OTC derivatives transactions, and highlights their shortcomings. The book uses a normative risk-based approach to regulation as a methodological lens to analyse the UK regime of CCPs in the OTC derivatives market. It specifically focuses on prudential supervision and conduct of business rules governing OTC derivatives transactions and the move towards enhancing the use of central clearing. The resulting analysis, from a normative risk based approach, suggests that the UK regime for CCPs does not fulfil what would be expected if a coherent risk based approach was taken. ? Our comments on the Dodd-Frank Act highlight that the incoherent adoption of risk-based approach to regulation affects the effectiveness of the US regime for CCPs. Such a regime does not follow the pace of events of ‘innovation risk’; in particular, the foreseeable changes FinTech will bring to the OTCDM and central clearing services. The second inadequacy of the US regime concerns the dual regulatory structure of the CFTC and the SEC, and the inadequate adoption of different and not well-coordinated regulatory strategies. We also analyse the cross-border implications of the US regime for non-US CCPs that provide clearing services to US market participants. Finally, we study the negative effects of the absence of a clearly defined resolution regime for CCPs.

The Law of Corporate Finance: General Principles and EU Law

Volume II: Contracts in General
Author: Petri Mäntysaari
Publisher: Springer Science & Business Media
ISBN: 9783642030550
Category: Law
Page: 426
View: 7532

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1. 1 Investments, Generic Contracts, Payments According to Volume I, contracts are one of the five generic legal tools used to manage cash flow, risk, agency relationships, and information. Many investments are therefore based on one or more contracts. Obviously, the firm should draft good contracts. Good drafting can ensure the same intended cash flow with reduced risk. Bad drafting can increase risk. This volume attempts to deconstruct contracts used by non-financial firms and analyse them from a cash flow, risk, agency, and information perspective. The starting point is a generic contract, i. e. a contract which does not belong to any particular contract type (Chapters 2–7). This volume will also focus on payment obligations. Payment obligations are characteristic of all financial instruments, and they can range from simple payment obligations in minor sales contracts and traditional lending contracts (Chapters 8– 11). 1. 2 Particular Contract Types A number of particular contract types have been discussed in the other volumes of this book. (1) A certain party’s investment contract can be another party’s fu- ing contract. Particular investment contracts will therefore be discussed in Volume III in the context of funding. (2) Many contracts are necessary in the context of business acquisitions discussed in Volume III. (3) Multi-party contracts are c- mon in corporate finance. The firm’s contracts with two or more parties range from syndicated loans to central counterparties’ contracts. Such contracts will be discussed both in Chapter 12 and Volume III.

Dalhuisen on Transnational Comparative, Commercial, Financial and Trade Law Volume 3

Financial Products, Financial Services and Financial Regulation
Author: Jan H Dalhuisen
Publisher: A&C Black
ISBN: 1782252150
Category: Law
Page: 814
View: 3054

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This is the fifth edition of the leading work on transnational and comparative commercial and financial law, covering a wide range of complex topics in the modern law of international commerce, finance and trade. As a guide for students and practitioners it has proven to be unrivalled. Since the fourth edition, the work has been divided into three volumes, each of which can be used independently or as part of the complete work. Volume one covers the roots and foundations of private law; the different orientations and structure of civil and common law; the concept, forces, and theoretical basis of the transnationalisation of the law in the professional sphere; the autonomous sources of the new law merchant or modern lex mercatoria, its largely finance-driven impulses; and its relationship to domestic public policy and public order requirements. Volume two deals with transnational contract, movable and intangible property law. Volume three deals with financial products and financial services, with the structure and operation of modern commercial and investment banks, and with financial risk, stability and regulation, including the fall-out from the recent financial crisis and regulatory responses in the US and Europe. All three volumes may be purchased separately or as a single set. From the reviews of previous editions: "...synthesizes and integrates diverse bodies of law into a coherent and accessible account...remarkable in its scope and depth. It stands alone in its field not only due to its comprehensive coverage, but also its original methodology. Although it appears to be a weighty tome, in fact, in light of its scope, it is very concise. While providing a wealth of intensely practical information, its heart is highly conceptual and very ambitious...likely to become a classic text in its field." American Journal of Comparative Law "Dalhuisen's style is relaxed...what he writes convinces without the need for an excess of references to sources...a highly valuable contribution to the legal literature. It adopts a useful, modern approach to teaching the young generation of lawyers how to deal with the increasing internationalisation of law. It is also helpful to the practising lawyer and to legislators." Uniform Law Review/Revue de Droit Uniforme "this is a big book, with big themes and an author with the necessary experience to back them up. ... Full of insights as to the theories that underlie the rules governing contract, property and security, it is an important contribution to the law of international commerce and finance." Law Quarterly Review "...presents a very different case: that of a civilized and cultivated cosmopolitan legal scholar, with a keen sense of international commercial and financial practice, with an in-depth grounding in both comparative legal history and comparative law, combined with the ability to transcend conventional English black-letter law description with critical judgment towards institutional wisdom and intellectual fashions. ...a wide-ranging, historically and comparatively very deep and comprehensive commentary, but which is also very contemporary and forward-looking on many or most of the issues relevant in modern transnational commercial, contract and financial transactions..." International and Comparative Law Quarterly

The Law of Securities, Commodities and Bank Accounts

The Rights of Account Holders
Author: Marek Dubovec
Publisher: Edward Elgar Publishing
ISBN: 1782549021
Category: Business & Economics
Page: 256
View: 1004

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The author identifies and explains the critical components and functions of the systems for the holding of rights in accounts with intermediaries, identifying underlying principles that should be embodied in modern legislation underpinning the law of a

Regulating Financial Derivatives

Clearing and Central Counterparties
Author: Alexandra G. Balmer
Publisher: Edward Elgar Publishing
ISBN: 1788111923
Category: Business & Economics
Page: 256
View: 3344

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This book puts forward a holistic approach to post-crisis derivatives regulation, providing insight into how new regulation has dealt with the risk that OTC derivatives pose to financial stability. It discusses the implications that post crisis regulation has had on central counterparties and the risk associated with clearing of OTC derivatives. The author offers a novel solution to tackle the potential negative externalities from the failure of a central counterparty and identifies potential new risks arising from post crisis reforms.

Research Handbook on International Financial Regulation


Author: Kern Alexander,Rahul Dhumale
Publisher: Edward Elgar Publishing
ISBN: 0857930451
Category: Law
Page: 464
View: 5598

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The globalisation of financial markets has attracted much academic and policymaking commentary in recent years, especially with the growing number of banking and financial crises and the current credit crisis that has threatened the stability of the global financial system. This major new Research Handbook sets out to address some of the fundamental issues in financial regulation from a comparative and international perspective and to identify some of the main research themes and approaches that combine economic, legal and institutional analysis of financial markets. Specially commissioned contributions represent diverse viewpoints on the financial regulation debate and cover a number of new and controversial topics not yet adequately addressed in the literature. Specifically, these include; financial innovation particularly in the context of the credit risk transfer market, securitization and the systemic importance of the over-the-counter trading markets; the institutional structure of international financial regulation; and risk management and corporate governance of financial institutions. This Handbook will provide a unique and fully up-to-date resource for all those with an interest in this critical issue including academic researchers in finance and regulation, practitioners working in the industry and those involved with regulation and policy.

Running the World's Markets

The Governance of Financial Infrastructure
Author: Ruben Lee
Publisher: Princeton University Press
ISBN: 9781400836970
Category: Business & Economics
Page: 472
View: 3888

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The efficiency, safety, and soundness of financial markets depend on the operation of core infrastructure--exchanges, central counter-parties, and central securities depositories. How these institutions are governed critically affects their performance. Yet, despite their importance, there is little certainty, still less a global consensus, about their governance. Running the World's Markets examines how markets are, and should be, run. Utilizing a wide variety of arguments and examples from throughout the world, Ruben Lee identifies and evaluates the similarities and differences between exchanges, central counter-parties, and central securities depositories. Drawing on knowledge and experience from various disciplines, including business, economics, finance, law, politics, and regulation, Lee employs a range of methodologies to tackle different goals. Conceptual analysis is used to examine theoretical issues, survey evidence to describe key aspects of how market infrastructure institutions are governed and regulated globally, and case studies to detail the particular situations and decisions at specific institutions. The combination of these approaches provides a unique and rich foundation for evaluating the complex issues raised. Lee analyzes efficient forms of governance, how regulatory powers should be allocated, and whether regulatory intervention in governance is desirable. He presents guidelines for identifying the optimal governance model for any market infrastructure institution within the context of its specific environment. Running the World's Markets provides a definitive and peerless reference for how to govern and regulate financial markets.

The Foundations and Future of Financial Regulation

Governance for Responsibility
Author: Mads Andenas,Iris H-Y Chiu
Publisher: Routledge
ISBN: 113504337X
Category: Law
Page: 544
View: 3067

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Financial regulation has entered into a new era, as many foundational economic theories and policies supporting the existing infrastructure have been and are being questioned following the financial crisis. Goodhart et al’s seminal monograph "Financial Regulation: Why, How and Where Now?" (Routledge:1998) took stock of the extent of financial innovation and the maturity of the financial services industry at that time, and mapped out a new regulatory roadmap. This book offers a timely exploration of the "Why, How and Where Now" of financial regulation in the aftermath of the crisis in order to map out the future trajectory of financial regulation in an age where financial stability is being emphasised as a key regulatory objective. The book is split into four sections: the objectives and regulatory landscape of financial regulation; the regulatory regime for investor protection; the regulatory regime for financial institutional safety and soundness; and macro-prudential regulation. The discussion ranges from theoretical and policy perspectives to comprehensive and critical consideration of financial regulation in the specifics. The focus of the book is on the substantive regulation of the UK and the EU, as critical examination is made of the unravelling and the future of financial regulation with comparative insights offered where relevant especially from the US. Running throughout the book is consideration of the relationship between financial regulation, financial stability and the responsibility of various actors in governance. This book offers an important contribution to continuing reflections on the role of financial regulation, market discipline and corporate responsibility in the financial sector, and upon the roles of regulatory authorities, markets and firms in ensuring the financial health and security of all in the future.

Central Counterparties: Addressing their Too Important to Fail Nature


Author: Froukelien Wendt
Publisher: International Monetary Fund
ISBN: 1498322050
Category: Business & Economics
Page: 25
View: 7137

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Central counterparties (CCPs) can offer significant benefits to a market. However, CCPs are also highly interconnected with financial institutions and markets and therefore too important to fail. The increased volumes cleared through CCPs and their increasing global scope, in particular in the OTC derivatives market, make it even more important that systemic risks related to CCPs are managed. This paper argues that the current set of international policy measures does partly address these risks, but that alternative policy measures are needed to reduce remaining systemic risks. For example, the paper recommends network analysis to be conducted by CCPs and authorities to gauge potential losses and suggests a common international approach to central bank services to help reduce the dependency of CCPs on services provided by commercial banks.

Global Securities Markets

Navigating the World's Exchanges and OTC Markets
Author: George W. Arnett
Publisher: John Wiley & Sons
ISBN: 9781118056622
Category: Business & Economics
Page: 192
View: 4891

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The quick guide to understanding the global securities markets Investing in the global securities markets poses challenges far beyond simply choosing a security that's likely to provide a decent return. Global Securities Markets provides a framework for navigating through these highly diverse and complex markets, covering all the basics of global investing. Packed with tables and listings to help investors of all types easily locate the information they need to make the right choices, the book is an indispensible index for working the securities markets to their fullest extent. The book covers: The mechanics of execution, clearing, settlement, custody, regulation, and practice in the US, UK, and European markets Margin, short selling, prime brokerage, and the evolving disciplines of risk management, anti-money laundering, and international compliance With 110 securities exchanges and 40 derivatives exchanges, it is more important than ever for the savvy investor to understand the global securities markets, and Global Securities Markets illustrates the rich history of the markets, how they work, and relevant contemporary legal concepts.

Mexico: Financial System Stability Assessment Update, including Summary Assessments on the Observance of Financial Sector Standards and Codes on the following topics: The Basel Core Principles for Effective Banking Supervision, and the IOSCO Objectives a


Author: International Monetary International Monetary Fund
Publisher: International Monetary Fund
ISBN: N.A
Category:
Page: 69
View: 6743

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1. Mexico has been hard hit by the global crisis, essentially for reasons outside the authorities' control. Financial conditions tightened sharply following the failure of Lehman Brothers last September. At the height of the turmoil, some Mexican corporates incurred large losses on foreign currency derivatives transactions, which put substantial pressure on the exchange rate and credit spreads. As the U.S. downturn intensified-especially the collapse of industrial production which has large spillovers to Mexico-real activity weakened very sharply. Combined with still heightened financial market strains, concerns arose earlier this year over tail risks of a downward spiral as discussed in IMF Country Report No. 09/126.

European Union

Publication of Financial Sector Assessment Program Documentation—Technical Note on Cross-Border Issues, Central Counterparties, and Central Securities Depositories
Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
ISBN: 1475562063
Category: Business & Economics
Page: 24
View: 4808

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The analysis focuses on the effectiveness of the regulatory, supervisory, and oversight frameworks for central counterparties (CCPs) and central securities depositories (CSDs) in the European Union (EU) as these are essential for financial stability. Cooperation between authorities within and outside the EU is critical to reduce the risks related to the cross-border nature of clearing and settlement within the EU. In this context, crisis management arrangements among EU authorities are of key importance to adequately fulfill the various responsibilities that authorities may have in relation to CCPs and CSDs in crisis situations.

Central Counterparties Resolution—An Unresolved Problem


Author: Mr.Manmohan Singh,Dermot Turing
Publisher: International Monetary Fund
ISBN: 1484348443
Category: Business & Economics
Page: 23
View: 3561

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Recovery and resolution regimes are being developed for central counterparties (CCPs). We analyse current resolution tools in the context of policy, which is to restore the critical functions of a failed CCP. We conclude that the toolkit is insufficient to avoid the costs of resolution being borne by taxpayers, and propose alternative policy suggestions for addressing the problem of a failed CCP.

Italy

Financial Sector Assessment Program: Detailed Assessment of Implementation of the IOSCO Objectives and Principles of Securities Regulation
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 145188253X
Category: Business & Economics
Page: 26
View: 9495

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This paper discusses the Financial Sector Assessment Program focusing on Detailed Assessment of Implementation of the International Organization of Securities Commission (IOSCO) Objectives and Principles of Securities Regulation for Italy. The IOSCO Principles list a number of preconditions to effective securities regulation. These include the appropriateness of legal, tax, and accounting framework within which the securities market operates, the effectiveness of procedures for the efficient resolution of problems in the securities market, and the soundness of macroeconomic policies. These preconditions appear to be in place in Italy.

People’s Republic of China–Hong Kong Special Administrative Region: Financial Sector Assessment Program-IOSCO Objectives and Principles of Securities Regulation-Detailed Assessment of Observance


Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
ISBN: 1498324231
Category: Business & Economics
Page: 223
View: 7790

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In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.

Clearing and Settlement


Author: Dermot Turing
Publisher: Bloomsbury Publishing
ISBN: 1784510696
Category: Banks and banking
Page: 642
View: 9428

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Présentation de l'éditeur : "Clearing and Settlement (originally titled: Clearing and Settlement in Europe), Second Edition comprehensively explains, both in theory and practice, the complexities of the law and regulation surrounding the processes of clearing and settlement. Clearing and Settlement: 1. Describes what happens in clearing and settlement, and the roles of (and risks assumed by) the various participants in the post-trade marketplace ; 2. Explores the law applicable to infrastructures, how they are regulated, and considers the other topographical features of their legal landscape ; 3. Examines the legal and practical aspects of risk management and operations of infrastructures ; 4. Looks at the risks faced by participants in payment, clearing and settlement systems - the agent banks - along with practical and operational issues which they face in their roles. New legislation includes: · CSD (Central Security Depositories) Regulation and level 2 measures ; · MiFID 2/MiFIR and level 2 measures ; · EMIR and level 2 measures ; · Banking Act 2009 revisions ; · Bank Recovery and Resolution Directive ; · Revised Part VII Companies Act 1989 ; · New Part XVIII of FSMA and Recognition Requirements Regulations ; · Financial Services Act 2012. In addition to the coverage of the legislature, there are numerous diagrams and commonly encountered practical problems are discussed, eg 'client clearing', tax, regulatory capital and protective insolvency legislation. Risk and legal issues arising in clearing and settlement operations, eg liquidity, outsourcing, corporate actions and securities lending are also covered."

Central Counterparties

Mandatory Central Clearing and Initial Margin Requirements for OTC Derivatives
Author: Jon Gregory
Publisher: John Wiley & Sons
ISBN: 1118891589
Category: Business & Economics
Page: 328
View: 2808

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Practical guidance toward handling the latest changes to the OTC derivatives market Central Counterparties is a practical guide to central clearing and bilateral margin requirements, from one of the industry's most influential credit practitioners. With up-to-date information on the latest regulations imposed after the global financial crisis, this book covers the mechanics of the clearing process and analyses the resulting consequences. Detailed discussion explains the ways in which the very significant clearing and margining rules will affect the OTC derivatives market and the financial markets in general, with practical guidance toward implementation and how to handle the potential consequences. Over-the-counter derivatives were blamed by many for playing a major role in the 2007 financial crisis, resulting in a significant attention and dramatic action by policymakers, politicians, and regulators to reduce counterparty credit risk which was seen as a major issue in the crisis. The two most important regulatory changes are the mandatory clearing of standardised OTC derivatives, and the requirements for bilateral margin posting in non-standard OTC contracts. Central Counterparties is a complete reference guide to navigating these changes, providing clarification and practical advice. Review the mitigation of counterparty credit risk with the historical development of central clearing Clarify the latest regulatory requirements imposed by Dodd-Frank, EMIR, Basel III and more Learn the mechanics of central clearing, with special attention to complex issues such as margin calculations, the loss waterfall, client clearing and regulatory capital rules Gain insight into the advantages and disadvantages of clearing and bilateral margin requirements, and the potential issues that arise As the clearing and margining mandates are phased in, the associated costs will be severe enough to dramatically shift the topology of the financial markets and transform the nature of risk. Central Counterparties provides the information, clarification and expert insight market practitioners need to get up to speed quickly.