The UK Financial Conduct Authority (FCA) recently published a discussion paper to gauge market participants' views on how the future development of distributed ledger technology (DLT) should be regulated by the FCA in FCA-regulated markets. As industry efforts to use DLT continue, the FCA expects that in the second half of 2017 and into 2018 there will be more movement from the 'proof of concept' stage to 'real-world' deployments.
While the impact of Brexit would depend on the precise terms of the outcome of the exit negotiations, there are potential issues that may affect derivative transactions. Given the importance of the derivatives market to the United Kingdom, a post-Brexit UK government would be keen to ensure that the protections for derivative transactions remain in place, and that the United Kingdom continues to benefit from any cross-border arrangements.
A recent High Court judgment provides a stark and costly reminder that notices under Section 12 of the 1992 International Swaps and Derivatives Association Master Agreement must be delivered in the manner prescribed therein. Unless expressly specified, email and telephone notice is an unacceptable method of delivery and any notice delivered by such means will be ineffective as a matter of law.
Following its July 2008 announcement proposing the adoption of a general disclosure regime for contracts for difference, the Financial Services Authority has published a further consultation paper. Once finalized, the new rules will require disclosure of long contract for difference positions under the Disclosure and Transparency Rules at an initial threshold of 3% of total voting rights and every 1% thereafter.
Financial institutions are taking advantage of the growth in emissions trading and other environmental projects by launching multiple environmentally friendly products and climate change thematic indices. The new market faces challenges, such as a lack of empirical data supporting the indices, but standardized access to information and the international harmonization of energy laws should boost its growth.
Credit derivative product companies have been described as highly rated, capital-efficient and successful managers of diverse and complicated risk, but why have so few made it to market? This update considers their structure and history, the importance of a AAA rating and the prospects for the market in the fallout of structured credit product downgrades.
There has been much recent discussion in the industry of the use of limited shorting techniques in the form of '130/30' funds providing full market exposure or beta with additional alpha. Can the strategy be accommodated within an undertakings for collective investment in transferable securities product offering?