The Financial Stability Board (FSB) recently published two reports on the implementation of key aspects of reforms to the over-the-counter (OTC) derivatives market. They show that although progress continues to be made, further action is required, particularly on implementing margin requirements and platform trading commitments, and on removing legal barriers to trade reporting and authorities’ access to data held by trade repositories.
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Nordea Bank AB (“Nordea”) has announced that it has entered into a synthetic risk transfer trade related to EUR 8.4bn of Nordea’s loan portfolio. Under the transaction, investors have agreed to invest in notes linked to the junior credit risk of the portfolio. Continue reading…

The Financial Stability Board (FSB) published today its peer review of India. The peer review examined two topics relevant for financial stability and important for India: the macroprudential policy framework, and the regulation and supervision of non-banking finance companies (NBFCs) and housing finance companies (HFCs). The review focused on the steps taken by the authorities to implement reforms in these areas, including with respect to the recommendations in the 2012 Financial Sector Assessment Program (FSAP) report by the International Monetary Fund (IMF) and the World Bank.
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The revisions to the disclosure requirements address shortcomings in Pillar 3 of the Basel framework. The revised disclosure requirements will enable market participants to better compare banks’ disclosures of risk-weighted assets. They form part of the Committee’s broader agenda to reform regulatory standards for banks in response to the global financial crisis. The revisions notably focus on improving the transparency of the internal model-based approaches that banks use to calculate minimum regulatory capital requirements.
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by Robert Schneider

In an effort to ensure compliance with financial crime regulations, regulators globally are beginning to focus their attention on the corporate sector. Many companies are regarding this new responsibility with scepticism and try to assign it to their banks. However, due to the complexity of the respective regulations, this approach is neither constructive nor a free pass for the future. But by attending to the issue and acting quickly, they can avoid negative effects to their core business.
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Nasdaq BWise recently announced that it has been selected by Dubai Islamic Bank, the largest Islamic bank in the United Arab Emirates, to support and further enhance their risk management, compliance and internal control processes gaining a deeper and more real-time visibility into their risks and overarching control frameworks.
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The Financial Conduct Authority (FCA) has today fined Cenkos Securities plc (Cenkos) £530,500 for failures in its sponsor services business. Cenkos failed to have appropriate systems and controls in place across its sponsor services business, and, on a particular transaction, failed to act in its sponsor role with the level of diligence and professional care that the FCA expects.
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The Financial Stability Board (FSB) has launched a peer review on the implementation of the G20/Organisation for Economic Co-Operation and Development (OECD) Principles of Corporate Governance (Principles). The overarching objective of the review is to take stock of how FSB member jurisdictions have applied the Principles to publicly listed, regulated financial institutions, identifying effective practices and areas where good progress has been made while noting gaps and areas of weakness.  Continue reading…

by Hans Bevers

The Bremain scenario was our (very uncomfortable) base case scenario going into the referendum but now seems (because it’s not 100% sure that an exit will happen) to be off the table. The effects of a Brexit both from an economic and asset allocation point of view are just impossible to ignore. That said, while the outcome is highly unwelcome, this is not the end of the world. The global economic recovery is still weak and of course Brexit will make things harder but doom scenarios in terms of huge economic fallout seem exaggerated for now. Moreover, European politics were already quite worrying even before this latest referendum.
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