Derivs - FX

China’s foreign exchange and interbank money market announced on Wednesday that foreign financial instituions conducting FX forward-trading will have to start setting aside reserves later in the year.

The United Kingdom's vote to leave the European Union sent traders, lawyers and trade associations into overdrive this week as they sought clarity on whether contractual changes for derivatives will be required, what form they would take and how they could be modelled.

European credit spreads enjoyed a unanimous rally on Thursday as the odds of the UK leaving the European Union receded.

The European Commission will likely go against a recommendation made by the regulator that penned the Markets in Financial Instruments II standards, in a bid to ensure liquidity in the bond and derivatives markets isn’t damaged by the rule’s implementation, GlobalCapital understands.

Bonds, derivatives and other non-equity instruments will be subject to the automatic phase-in of pre-trade transparency reporting requirements, despite pushback from elected officials, a top regulator said on Tuesday.

In this round-up, China introduces a new calculation for bank’s reserve ratio, trading of RMB futures in Hong Kong drops, the Shenzhen Stock Exchange (SZSE) is ready for Hong Kong Connect, and Singapore’s central bank sees a slowdown in RMB internationalisation. Plus, a recap of GlobalRMB’s coverage this week.

A growing number of foreign exchange brokers are increasing their margin requirements on currency trades to protect themselves from Brexit volatility, with several outlining planned hikes around this month’s UK referendum.

The Taiwan Futures Exchange (Taifex) is set to launch the first exchange-traded options on RMB rates this month, the exchange told GlobalRMB. Taifex is also seeking regulatory approval to launch more A-shares index futures.

The state of Illinois sank deeper into trouble over a budget impasse this week, with Moody's cutting the US state's credit rating while a key financial market figure told lawmakers that a proposed derivatives tax would only worsen problems rather than help solve them.

The International Islamic Financial Market (IIFM) and the International Swaps and Derivatives Association have added to the number of Shariah compliant hedging tools available to investors with two standards for Islamic forward foreign exchange products.

GlobalCapital is delighted to announce the winners of its Americas Derivatives Awards for 2016. The results were revealed at a gala dinner at New York’s Metropolitan Club on June 2. Thank you to everyone who supported the event by attending and for taking part in the pitches that decided who were the best and brightest in US, Canadian and Latin American derivatives over the last 12 months.

The European Securities and Markets Authority (ESMA) is stepping up regulatory oversight of contracts for difference and other products it deems ‘speculative’ that are sold to retail investors.