Sovereign Credit Commentary

With less than 10 months to go before the expected implementation of the Settlement Discipline Regime in February 2021, the sell-side’s preparations are well underway. Given the potential impact of SDR on banks and broker-dealers, there is extensive ground to cover ahead of the go live date.

In a negative interest rates environment, dividend strategies are becoming increasingly popular as a way to create positive yield for investors.

As UK loan, bond and derivative market participants work to the deadline of December 31, 2021 to stop using Libor, one of the biggest hurdles is how to calculate the new reference rate: Sonia.

Nearly six years ago to the day the European Commission adopted the technical standards for the European Market Infrastructure Regulation (EMIR) that, among other things, mandated the reporting of derivatives contracts to trade repositories.

The breakdown of trust in ISDAfix following allegations of collusion and manipulation in 2012 led to a complete overhaul of the benchmark. A recent report by the Financial Conduct Authority proves that the hard work is paying off, reaffirming the potential for the model to be applied to other benchmarks.

Inline warrants are growing in popularity as a means of generating returns when volatility is low.

​New regulations have uncovered heaps of data that markets are struggling to handle. But as participants discover issues exist they did not realise existed, the data revolution will result in safer and more efficient markets for all.

As banks struggle with tracking brokerage costs, they need to work out ways to properly manage cost transparency by normalising their trade data.

Proponents of the ISDA Common Domain Model say that if properly implemented, it could generate major cost savings for financial institutions. But what is it, what prompted its creation and how could it work with distributed ledger technology?

Not a day goes by without some analyst, regulator or senior exchange executive weighing in on where the clearing of euro swaps should reside post-Brexit.

Equity repo, a way to lend shares to the market, is a key parameter in equity derivatives trading but is yet to be fully considered and monetised. Given the opportunities that exist in the space, market participants would do well to change tack.

Deal-contingent hedging can be a great way to hedge risks associated with mergers and acquisitions, but a number of pitfalls can flummox first time users of these specialist derivatives.