Regulation
A thicket of new rules has sprung up around the investing community. Some of them apply directly and specifically to certain types of firms; others snare activities or individuals. All carry more weight than they may have done in the past, as the penalties for non-compliance have increased.
Risk.net focuses on regulation that relates to our other coverage areas – essentially, risk management and risk transfer. Right now, that includes rules and guidelines on liquidity risk, capital requirements, conduct, clearing and margining, as well as supervisory expectations around best execution and operational risk.
TCFD backs carbon disclosure, but not temperature scores
Influential standard setter decides the implied temperature rise ‘is not ready’ for funds
Insurers’ favourite credit rating becomes more expensive
US institutions face a dilemma: go up a rating and lose yield or go down a rating and increase risk
Green bonds risk failing TLAC test
Europe’s banks – in their scramble to issue ethical debt – butt up against tough rules on loss-absorbing capital
Green push from SEC could trigger another ‘Enron’, says Peirce
SEC commissioner warns that mandating ESG disclosure standards would distort capital flows
Banks and HFTs team up to solve exchange outage dilemma
Hopes that ‘gentlemen’s agreement’ can break first-mover disadvantage for liquidity providers
Green figures: EU funds search for sustainable taxonomy data
Fund managers must report compliance with taxonomy before many investee companies
Shades of green: sustainability guidance may not help EU funds
Talk of high SFDR hurdle for ESG funds stokes fears “sustainable” label will be unobtainable
Trouble in the family: regulators’ options after Archegos
What rule changes are needed in response to the messy collapse of Bill Hwang’s firm?
EU still undecided on how to implement minimum repo haircuts
Concerns over non-bank leverage may derail push to include haircuts in bank capital rules
New Hong Kong fund rules collide with China’s poor ESG data
Under proposed rules, funds will need climate risk data from investee firms, many of them Chinese
A bitcoin ETF could threaten the world’s biggest crypto fund
Regulated funds may suck away demand for Grayscale’s off-exchange investment trusts
UK snuffs out hopes of end to midpoint trading ban
Financial Conduct Authority resists calls to diverge from EU’s tick size regime
BlackRock: fix commercial paper before MMF meddling
Iosco official agrees that CP market needs to be considered alongside MMF reform
UK Treasury opens door to ditching Mifid open access rules
Champion of competition in derivatives clearing may throw in the towel
European funds fret over merits and risks of ethical labels
Managers unsure whether to “aspire to” or “run away” from new ESG classifications for funds
EU fund managers confused by new ESG designations
Vague rules leave managers unsure which categories to apply to their funds
Trading heads call for reform of double volume caps
Asset managers endorse UK move on caps and back changes to EU’s unloved share trading restrictions
UK offers unlimited dark trading on lost EU stocks
FCA gives London dark pools an edge over EU rivals, but will fund managers use it?
Esma warns of UK-sized hole in Europe’s fund leverage radar
Executive at hedge fund AQR also urges reform of EU leverage measures to better assess risk
CFTC’s Behnam: regulators must be alert to ‘greenwashing’
Risk USA: ESG products that miss sustainability goals may fall foul of customer protection rules
Joe Biden’s slow road to remaking US financial regulation
Moves on climate risk could come early; other changes may have to wait until end of 2021, or later
Bailed-out basis traders face regulatory backlash
The cash/futures basis trade could be a test case for regulating systemically risky activities
SFC’s Alder looks to shake up liquidity rules post-Covid
Asia Risk 25: HK regulatory head says central banks must “never have to step in again” to bail out investors
Mifid best execution relief for buy side hangs by a thread
Largest grouping in European Parliament faces uphill battle to suspend RTS 28 reporting