Press releases

Press releases, latest news and views from EVIA

Article reports that banks have been slow in the uptake on loans based on Sonia, despite significant progress in the derivatives and benchmark bonds markets, due to a lack of infrastructure, systems, a working term rate and client demand. Article includes comments from David Clark, who highlights that authorities need to take the requirements of different user groups into account when setting out plans for the transition from Libor, as participants of different markets will have different priorities and needs.

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Article discusses how Sonia is calculated, how widely it is used and the role of Sonia in the development of a new benchmark rate. The article explains that Sonia has a backward-looking application calculated on a compounding basis, making it harder to manipulate than Libor. Article mentions that Sonia was previously administered by WMBA and includes comments from David Clark on the current lack of liquidity in Sonia contracts.

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Article reports that the FCA has been looking into brokers’ practices to detect possible abuses on the ban on payment for order flow (PFOF) as the rule didn’t apply to all brokers and banks and because the specifics of what constitutes as a breach isn’t always clear. Article includes comments from Alex McDonald and David Clark highlighting how regulators may be trying to draw a line under the PFOF issue for several reasons, namely, that it originated from the exchange-traded equities market, rather than the derivatives market; that there have only been isolated evidence of malpractice; and that the FCA wouldn’t want these rules to undermine the UK’s attempts to maintain regulatory equivalence with the EU.

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