Five hundred to one thousand percent. That’s the eye-popping prediction of the coming increase in margin calls in a new report from US market infrastructure Depository Trust & Clearing Corp. (DTCC), “Trends, Risks and Opportunities in Collateral Management.” The trigger: new regulations and recommendations requiring far more transactions in far more asset classes to be collateralized. Relying on […]
WAMCO Fine: A Coding Error or Compliance Breakdown?
A computer coding error. That’s how most media outlets explained one of the key reasons the US Securities and Exchange Commission and the US Department of Labor whammied a large US fixed-income fund manager with a US$22 million fine. The second is inappropriate cross-trading which unfairly benefited one group of clients at the expense of others. But […]
EMIR: One Little Number Can Make or Break Reporting
With the European regulatory requirements for reporting exchange-traded and over-the-counter swap transactions less than a month away, fund managers can’t afford a leap of faith that they will be ready, warn regulatory and operations experts. There is a key nagging issue they must resolve before February 12: just who will create the 52-character unique trade […]
Margin Standards for TBAs May Edge Funds Out of the Market
Despite a six-month reprieve from collateralizing their US forward-settling agency mortgage-backed securities trades, many fund managers may be dismally unprepared for new margining standands, and shut out of the market. The answer won’t come easy or cheap: either upgrading or installing collateral management systems will be required. Then comes the cumbersome process of redrafting contracts or writing […]
What to Do When the CFTC Gets Into Your Phone Calls
A new requirement from the Commodity Futures Trading Commission (CFTC) that all oral communications on some over-the-counter transactions be recorded, could end up being technologically and economically unfeasible. In its role as overseer of the burgeoning US$650 billion swaps market — a designation assigned by the US Dodd-Frank Wall Street Reform Act — the CFTC […]
FATCA: How to Reduce Ops Risk
At the core of FATCA is the need for foreign financial intermediaries to know and report whether securities accounts are owned by US persons who are deliberately trying to avoid paying their correct share of US taxes.In fulfilling the rules of FATCA, the US legislation designed to catch US tax evaders, financial firms would be […]