[ParticleMan]

http://www.bloomberg...6...&refer=home

Quote

The Federal Reserve has given futures exchanges until Oct. 31 to present written plans on how they'll make the market more transparent, said four people familiar with the request. The Fed called banks and exchanges into three meetings in two weeks, pressing them to agree on a clearinghouse that would require dealers to post collateral and pay into a fund that would absorb losses if one of them were to fail.
:
Four groups are vying to operate clearing operations, including a partnership between Chicago-based CME Group Inc. and Citadel Investment Group LLC and a team consisting of dealer- owned Clearing Corp., Atlanta-based Intercontinental Exchange Inc. and credit-default swap index owner Markit Group Ltd. Eurex AG, the world's biggest futures exchange, and NYSE Euronext have also submitted proposals.

The push to make the industry more transparent may finally let exchange-traded derivatives gain traction after years of failing to compete with banks. Eurex, the world's biggest futures exchange, opened the first market for exchange-traded credit derivatives in March 2007, beating Chicago Mercantile Holdings Inc. and Euronext, though dealers resisted moving to their platforms because it threatened their profits.

``The CDS market is going to go to exchanges,'' Emmanuel Roman, co-chief executive officer of GLG Partners Inc., which manages about $24 billion, said at the Hedge 2008 conference in London on Oct. 23. ``That's a very good development. Not good for the banks but good for everyone else.''

nb: they're deadly serious about this; the rules of the game are changing, forever, and any existing players trading largely on proprietry information are going to face some business-threatening challenges in the year or two ahead.

[Injin]

ParticleMan, on Oct 29 2008, 09:24 AM, said:

http://www.bloomberg...6...&refer=home

nb: they're deadly serious about this; the rules of the game are changing, forever, and any existing players trading largely on proprietry information are going to face some business-threatening challenges in the year or two ahead.

It's called pulling the ladder up, I believe.

[ParticleMan]

Injin, on Oct 29 2008, 09:25 AM, said:

It's called pulling the ladder up, I believe.

Actually if anything it broadens the market.

[ParticleMan]

The FT's take, and an interesting number.

http://www.ft.com/cm...0077b07658.html

Quote

The current value of credit derivatives outstanding is believed to be about $30,000bn, according to dealers, suggesting the nominal value of outstanding contracts has more than halved in recent months. Risk exposure is often estimated at about 4 per cent of the notional value outstanding.

[ParticleMan]

The EC putting their oar in too...

http://www.efinancia...tent/3352308035

Quote

In a meeting hosted in Brussels last week to discuss over-the counter derivatives markets, Charlie McCreevy, European Commissioner for the Internal Market and Services, said his office would shortly begin a consultation on post-trade services, according to a source present at the meeting.

The consultation is expected to address whether price transparency, interoperability and separation of accounting would be desirable in exchange traded derivatives.

[ParticleMan]

Finweek quotes the crazies on the CME sales team saying "we'll launch pre-alpha v0.93 by January! pick us!"

http://www.financial.../810289972/1036

Quote

CME Group’s planned clearinghouse for credit default swaps will be ready to go at the end of this week—and can begin operating after it gets regulatory approvals and completes testing with trading firms, CME managing director Tim Doar said today.

CME, the world’s largest derivatives exchange, has passed a series of internal tests aimed at gauging the system’s technical capability, financial safeguards and ability to conform to rule changes, Mr. Doar said in an interview.

[Injin]

ParticleMan, on Oct 29 2008, 09:27 AM, said:

Actually if anything it broadens the market.

Then the "important people" must be out of the game, no?

[ParticleMan]

Surprisingly good recap of the background on this story...

http://www.efinancia...tent/3352298061

This post has been edited by ParticleMan: 29 October 2008 - 09:58 AM

[ParticleMan]

Injin, on Oct 29 2008, 09:54 AM, said:

Then the "important people" must be out of the game, no?

It certainly changes their role (see the link I just pasted for the full nine yards).

[ParticleMan]

http://www.bloomberg...id=awdIS.zeotuY

Quote

Nov. 4 (Bloomberg) -- The Depository Trust & Clearing Corp. will publish details of the top 1,000 credit-default swaps today, bowing to regulatory pressure for more transparency in the $47 trillion market.

The data from the DTCC, which operates a central registry, will for the first time offer a clearer picture of the amount wagered on the creditworthiness of the world's companies and governments.
:
The DTCC, which matches and confirms 90 percent of electronic trades from the biggest dealers in the market, will list the companies and countries linked to the most credit- default swaps, including both the gross amount and a net figure that excludes offsetting trades between two parties.

[ParticleMan]

http://www.bloomberg...id=aZYSaaTg9xJg

Quote

After canceling out overlapping trades, investors have taken out a net $22.7 billion of contracts based on Italy's debt, $16.7 billion against Spain and $12.5 billion on Deutsche Bank of Frankfurt, the report shows.
:
Among companies, GE Capital Corp., the finance arm of General Electric Co., New York-based Morgan Stanley, Merrill Lynch & Co. and Goldman Sachs Group Inc. had the biggest dollar amount of contracts tied to their debt on a net basis after Deutsche Bank, Germany's biggest bank, the DTCC said. New York- based Merrill agreed in September to sell itself to Bank of America Corp.

The real numbers are here...

http://www.dtcc.com/...i.php?id=table6

... for the top 1000 single names.

Enjoy.

[WSG]

ParticleMan, on Oct 29 2008, 09:27 AM, said:

Actually if anything it broadens the market.

won't this make price discovery easier and end the "mark to model" concept, or will the exchange just be suspended in a big crisis, hence allowing Mark to model illusion to continue. I didn't see a date for exchange to start operations..am i being thick?

[Joey Buttafueco Jr]

WSG, on Nov 5 2008, 07:54 AM, said:

won't this make price discovery easier and end the "mark to model" concept, or will the exchange just be suspended in a big crisis, hence allowing Mark to model illusion to continue. I didn't see a date for exchange to start operations..am i being thick?

Why is price discovery difficult at the moment?

[ParticleMan]

WSG, on Nov 5 2008, 07:54 AM, said:

won't this make price discovery easier and end the "mark to model" concept, or will the exchange just be suspended in a big crisis, hence allowing Mark to model illusion to continue. I didn't see a date for exchange to start operations..am i being thick?

Proposals went in on the 31st (stateside) - these will be reviewed and a winning bid chosen and dates set. I'd take a guess that the eventual target will be 1H09 judging by the speed all this is moving so far.

Yes, it will make price discovery easier. I gather (around the traps) that the lack of continuous disclosure (in terms of knowing what net notional is outstanding on a given name at the time of origination) has been an embarrasingly huge problem in the market and a major contributor to the lockup.

[Joey Buttafueco Jr]

ParticleMan, on Oct 29 2008, 09:24 AM, said:

http://www.bloomberg...6...&refer=home

nb: they're deadly serious about this; the rules of the game are changing, forever, and any existing players trading largely on proprietry information are going to face some business-threatening challenges in the year or two ahead.

What is an example of proprietary information that will become more clear on the exchanges?