Week InReview |  Basel reform leaving swaps users in the dark: ISDA's O'Malia | SEC officials suggest zero-fee test in proposed access fee pilot  |  CFTC MRAC meeting notable quotables | ICYMI + Binge Reading Disorder
Friday, April 29, 2016
Let's recap
In case you missed it . . .
Basel reform leaves swaps users in the dark
ISDA's O'Malia
(Apr 28) Regulators should immediately undertake an assessment of the impact of Basel bank capital reforms on swaps and derivatives users, International Swaps and Derivatives Association CEO Scott O'Malia said at a hearing of the House Agriculture Commodity Exchanges Subcommittee.  Currently "there is literally no one who has any clear idea what the aggregate impact of each of these rules will be." Cross-border rules are scheduled for implementation in Sept. 2016 and March 2017 and  "we would appreciate the CFTC moving as expeditiously as possible with the final rules," O'Malia said.  Myrtle Makena's Tyler Gellasch  said he "respectfully disagrees" with financial firm testimony that rules will have "profound negative impacts" on end-users.  "If margin is first line of defense in a time of crisis then capital is the last before a bailout."  He used an example of cost to financial firm of $7.50 on a $100k swap transaction, or "the cost of a ham sandwich."
Zero-fee test in access fee pilot?
SEC's possible scenarios
(Apr 26) Securities and Exchange Chair Mary Jo White expressed interest in including a bucket that eliminates access fees and addressed a proposed pilot program at a meeting of the Equity Market Structure Advisory Committee. "What is the thinking about the possibility of having a group of securities for which access fees and rebates would be prohibited altogether?" White said in her opening remarks, and asked for comment on scenarios. "What are views about a de minimis approach versus a no fee and rebate approach?" Link to the meeting agenda here. Link to a webcast here.
CFTC's Market Risk Advisory Committee meets
Notable quotables
(Apr 26) "Issues of liquidity and volumes in the market are really not tied to the SEF situation in and of itself. They are more tied to regulation, capital constraints, P&L pressure, low rate environment." - Tradeweb CEO Lee Olesky

"Concerns end users have about transaction costs are "more likely the product of Federal Reserve policy rather than derivative rules under Dodd Frank. - Chatham Financial consultant Luke Zubrod

"Liquidity in interdealer markets has decreased in both the European and U.S. markets." - Goldman Sachs managing director Rana Yared

"Diminished trading liquidity and short volatility spikes that follow are rising threats to the healthy functioning of our markets." - CFTC Commissioner J. Christopher Giancarlo 
Binge reading disorder
Hand-curated, chosen with love
What They Teach You at Umpire School:  How to remember the rules and keep your hat from flying off while thousands of angry fans yell at you
- Slate

How companies use strategically timed announcements to confuse the market

If you want to be like Warren Buffet and Bill Gates, adopt their voracious reading habits
- Quartz

This is the real way big business peddles influence in Washington
- Vox

Your Dog Hates Hugs
Transparency.
Inclusiveness.
Consensus.