Sizing Up the Impact of Derivatives Regulation on the European Property Sector June 2014, CRE Finance World By Luke Zubrod and Phong Dinh In the online published edition of CRE Finance World, Chatham regulatory experts Luke Zubrod and Phong Dinh contributed on the topic of “Sizing Up the Impact of Derivatives Regulation on the European Property Sector” reviewing the state of EMIR enforcement and the emerging requirements facing financial risk management programmes. Download Complete Article

Read More...

This is part two in a three-part series on the hedging outlook for 2014. Last week, we reviewed current Fed Policy and discussed the impact on hedging programs in 2014. This week, we look at the path of derivatives regulation and the expanding role of global regulation on domestic hedging programs. Part II: Derivatives Regulation. Hedging programs in the U.S. changed monumentally over the past year. A veritable alphabet soup of regulatory requirements was heaped upon market participants, including the following: – ECP: Now all market participants must be Eligible Contract Participants (ECPs), or be qualified so by virtue of certain qualifying owners or guarantors. – LEI: Each hedging party must obtain and maintain a Legal Entity Identifier (LEI). – End-User Exception: All parties to a new transaction who are eligible to do so must now preserve the right to…

Read More...

I hope you’re hungry, because Bloomberg is serving up the next financial scandal. Last summer we learned about LIBOR manipulation, and how various panel banks had attempted to nudge the daily LIBOR fixing up or down with contributed rates that were “suggested” by their trader-friends, who would benefit from the resulting small directional movements. By all accounts, the rate scandal was a very big deal, shaking faith in over $300 trillion in linked financial instruments, spurring numerous investor lawsuits, and leading to The Wheatley Review, with its call for overhauling the structure, ownership, and oversight of this benchmark interest rate. If you thought it would be hard to imagine a bigger scandal, then apparently we all just lacked imagination. The LIBOR scandal is but a mere Hors d’oeuvre, compared to the enormously large feast that is the fixing scandal in…

Read More...

European Market Infrastructure Regulation (EMIR) Beginning mid-March 2013, European entities will need to know and make representations regarding their regulatory status under EMIR. An entity’s regulatory status will determine the application of new EMIR requirements. In addition, non-EU entities that transact with EU counterparties should also consider their status under EMIR in order to determine how certain requirements may, directly or indirectly, impact them. More Information: EMIR Overview If you have any questions on EMIR, please don’t hesitate to reach out to your Chatham advisor. Overview of Title VII of the Dodd-Frank Act

Read More...

Comments recently from ESMA’s (European securities regulator) chief Steven Maijoor indicated that the Europeans will apply margin requirements to FX trades (presumably including FX forwards) in Europe, setting up a potentially notable difference between the EU and US approaches. The article states: “Maijoor noted bilateral collateralization laws for affecting FX derivatives would be present in European regulations but not U.S. laws, according to the media outlet.” Majioor stated, “The real issue for FX derivatives that only a few have spotted is not the clearing obligation, but bilateral [collateralization]. The problem of international inconsistency and regulatory arbitrage is much more serious for margin for contracts that are not centrally cleared.”

Read More...