US and UK sound post-Brexit derivatives regulatory accord
The US Commodity Futures Trading Commission (CFTC) and the Bank of England have issued a joint statement assuring derivative market participants of continued access to trading and clearing after the UK’s exit from the European Union

Behave yourselves: EBA policy advisor warns against misuse of securitisation rules
The European securitisation market has come a long way over the last decade, and the message from one policy advisor is clear – don’t do anything to mess it up.

DTCC appoints Deriv/Serv board chairman to replace Thompson
The Depository Trust & Clearing Corporation (DTCC) has appointed a replacement board chairman of its Deriv/Serv credit derivatives repository following the retirement of Larry Thompson in December

SEC proposal could strengthen BDCs’ power to purchase funds
The Securities and Exchanges Commission (SEC) has released proposals to allow regulated US funds, including listed funds, closed-end funds and business development companies (BDCs), to acquire shares of other regulated funds in excess of current limitations

CDS lives to bring more fights as it steers past Ziggo and Sears
Credit default swaps have navigated two big tests of their rules, holding up to scrutiny on Ziggo Bond Finance (ZBF) and Sears Roebuck Acceptance Corp (SRAC), despite warnings they could weaken the product

CLO market holds breath as Japan risk retention looms
Risk retention compliant US CLOs could make a comeback after the Japan Financial Services Authority (JFSA) unveiled its proposed new risk retention framework, which could tie the hands of the world’s biggest buyers of US CLOs

CDS food fight as UNFI sues Goldman Sachs over SuperValu deal
United Natural Foods Inc (UNFI) has summoned Goldman Sachs to court, accusing the bank of bad faith in the way it handled the US retailer’s buyout of SuperValu last year, a transaction which caused the target firm’s CDS spread to bloat by over 200bp in one day

Isda seeks fallback spread vendor for derivatives
The International Swaps & Derivatives Association is seeking an independent service provider to calculate and publish adjustments to fallbacks it will use in interest rate benchmarks for its Isda definitions

Central counterparties need to improve after Nasdaq Clearing member default, says Isda
Derivative central counterparties (CCPs) must look to make a number of improvements to risk practices, the International Swaps and Derivatives Association has said in a paper that follows a clearing member default at Nasdaq Clearing in September

BlackRock BDC seeks shareholder approval to fast-track leverage increase
BlackRock TCP Capital Corp has become the latest business development company to seek shareholders’ approval to double its use of leverage

US regulation drives insurance money towards credit ETFs
Institutional investors are increasingly allocating to credit exchange-traded funds (ETFs), but their motivations are changing. These vehicles are famed for their liquidity, but several investors are said to be pouring money into them for the long term amid regulatory changes which have made ETF investments more favourable

Past returns: Bond buckets are pipedreams, right?
Five years ago in Creditflux we reported that Webster Bank’s CLO tranche investor Francis Mitchell had created a working group in response to the Volcker rule determining that regional banks could no longer invest in CLOs with bond buckets

Sears CDS battle lines set out in market-defining legal fight
Legal sides have set out their arguments in the high-stakes Sears Roebuck Acceptance Corp credit event external review, in what an industry group of asset managers claims is a “unique opportunity to provide clarity on one of the most important definitions for the credit default swap product”

Creditex obtains CFTC swap execution facility exemption
Creditex, the electronic brokerage for corporate bonds and credit default swaps, has been granted an exemption from a requirement to register with the US Commodity Futures Trading Commission as a swap execution facility

Golub Capital BDC looks to become fourth largest publicy traded BDC with merger
Golub Capital is seeking approval from its shareholders to merge its Golub Capital business development company (GBDC)  with another one of its business development companies, Golub Capital Investment Corporation (GCIC)

Market favours retrospective over forward-looking approach to Ibor benchmark fallbacks, says Isda
New benchmark fallbacks for derivatives contracts that reference interbank offered rates are likely to be based on the “compounded setting in arrears rate” and the “historical mean/median approach to the spread adjustment”, the International Swaps and Derivatives Association has said

LSTA asks for return of CLO bond buckets as part of Volcker reform
The Loan Syndication and Trading Association is advocating the return of high yield bond baskets within US CLO portfolios in what could be another sign of the shackles being loosened on CLO regulation in the US

Derivatives margin threshold should be €100 billion notional not €8 billion, says Isda
A regulatory threshold that requires counterparties to post initial margin (IM) on derivatives trades if they hold €8 billion notional or more exposure should be raised to €100 billion, the International Swaps and Derivatives Association has argued

Isda extends deadline for derivatives benchmark consultation
The International Swaps and Derivatives Association has extended the fast-approaching deadline for its consultation on derivatives benchmark fallbacks, to allow more time for responses

Isda and Linklaters roll out test version of initial margin docs service
Five and a half months of partnership between the International Swaps and Derivatives Association and Linklaters has borne fruit, with the launch of a test version of an online tool that will allow firms to electronically negotiate and execute initial margin (IM) documentation

Alarm sounds on margin rules as small funds look to make early inroads
A fast-approaching 1 September regulatory deadline for phase three market participants to apply initial margin (IM) to derivatives trades looks set to pass without serious mishap, according to lawyers and the International Swaps and Derivatives Association

CLO managers see risk retention hurdles as Brexit approaches
Barriers are emerging to UK-based CLO managers seeking risk retention compliance via both the sponsor and the originator route as the country edges closer to Brexit, sources say. 

They said it: My friend (not a fan of the president) said she would erect a statue of Trump if there was any further Volcker rule rollback
A US lawyer tells us that President Donald Trump is gaining admirers in the credit industry.

BDCs turn to CLO financing as effective alternative to bilateral leverage agreements
Business development companies now have the ability to take on an extra turn of leverage, but rating constraints mean they could end up using CLOs instead