Article reports that a consortium of industry bodies published a set of recommendations to reform the EU Benchmarks Regulation (BMR). In the paper the trade associations denounce fundamental flaws in the directive and argue that if applied in its current form, the regime could leave investors incapable to properly manage risk, ultimately threating financial stability in the European Union. Article features comments from David Clark, EVIA, stating that the proposals are timely in view of other BMR consultations and should be integrated into any revision of the regime. Clark, also added that “clarity about the status of third-country indices and benchmarks is essential, as is a review of the definition of critical, significant and non-significant benchmarks.”
Article reports that following the implementation of the European Union’s second Mifid II, which came into force in January 2018, market participants were required to increase the amount of price information available to investors in the EU’s fixed income and derivatives markets, however firms complain that the resulting data is largely unusable, and have urged legislators to, instead, focus on improving post-trade transparency, which involves the publication of trades already executed. Article includes comments from Alex McDonald, EVIA, stating that the review process should consider how market participants intend to view and ingest pre-trade transparency information.
Article features comments from Scott O’Malia, ISDA Chief Executive Officer, discussing key OTC derivatives issues in derivatiViews, and examining ISDA’s long-held commitment to making the market safer and more efficient. Article references that ISDA, along with ASIFMA, FIA and the Global Foreign Exchange Division of the GFMA, outlined a number of recommendations for modifications to the European BMR that are intended to reduce the potential for disruption and uncertainty for EU firms, while respecting the overarching aims of the regulation. Article includes comments from David Clark and Alex McDonald reflecting on the trade associations’ proposed changes.
Article reports on EVIA’s comments on the briefing paper published by ISDA, ASIFMA, FIA, and the Global Foreign Exchange Division of the GFMA with recommendations to reform the European Union Benchmarks Regulation (BMR) in light of the European Commission's review of the directive. Article includes comments from David Clark and Alex McDonald highlighting the importance of the original drivers of the Benchmark Regulation and noteworthy themes raised in the paper, namely the increasing role and reliance on disclosures going forward, together with the widespread subsidiarity of market functions across to central banks.
Article reports on market participants’ concerns of switching from Eonia to €STER as, with less than a year and a half to go, the level of activity remains significantly low. Article mentions that from a CCP standpoint, the low levels of trading on €STR should not be a disquiet. Alex McDonald, EVIA, added that this “current situation can be attributed to a combination of systemic issues and risk” and “transiting existing balance sheet items is much harder than starting new business on a new index.” Ultimately, market participants expect an uplift in the volume of contracts booked against €STR upon the discounting transition in July.
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