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Europe’s swaps clearing obligation looks set to be further delayed – potentially to 2016 – as regulators and lawmakers thrash out the final details for regulatory technical standards (RTS) within a legal framework that provides no equivalent to the No-Action relief that eased the implementation of a US mandate two years ago.
A surge in European stock prices, driven by the ECB’s €1.1trn monetary stimulus package, is driving stark changes in equity derivatives strategies across the region. A rush of inflows into rallying equity markets is opening the door for more protection buying as investors seek to lock in gains, while call overwriting strategies that dominated flow in recent years are losing their appeal.
Derivatives users breathed a sigh of relief last week after regulators bowed to industry pressure to delay requirements to post margin on over-the-counter contracts that are not centrally cleared.