REGULATORY ROUNDUP
Progress has been slow, however, and Bahrain is still far behind Dubai.
the past, clients of Russian brokers have largely had to rely on a voluntary self-regulatory regime created by the brokers themselves in order to create an image of Russia as a safe place for Forex traders. Now, things are about to change. According to government sources, Forex will be regulated in Russia by 2013. Among the rules Russian brokers will have to follow will be promotional material regulations intended to balance the currently prevalent emphasis on potential profit with a proper risk disclosure.
t .JEEMF &BTU %VCBJ TUJMM MFBEJOH UIF QBDL Dubai remains the FX capital of the Middle East, with many major FX brokers opening branches there and registering with the DMCC. Te regulatory environment is fairly relaxed compared to others, and there is a wealth of potential clients, especially for brokers who offer Sharia-compliant services.
After approving its first broker dealer last year, the Central Bank of Bahrain (CBB) has worked to put the kingdom in a position to compete with Dubai.
Cyprus has also been making progress on the regulatory front, with the Cyprus Securities and Exchange Commission (CySEC) extending its regulatory regime to binary options and registering its first binary options market maker earlier this year. Te binary options platform provider SpotOption is now considered a Cyprus Investment Firm (CIF), and adds investment services to its previous role of software provider.
t "TJB )PX XJMM #BTFM *** BąFDU CBOLT JO UIF SFHJPO Asian banks have largely been spared the turbulence that has plagued their European counterparts, and as a result, they have found reason to complain about having to comply with new regulations that were prompted by events in Europe. Te banks argue that the Basel III requirements currently being debated are poorly suited to the idiosyncrasies of the region’s banking system.
New capital rules set to impact pension fund swap deals
New rules changing the amount of capital banks must hold to transact derivatives are likely to impact pension funds in Europe. The good news is the effect is likely to be limited with smart structuring.
Sinead Leahy, Head of UK Pension Solutions Group and Sian Hurrell, Co-Head of European Rates Sales at RBS, discuss the implications for pension funds.
Find out what we think.
rbs.com/insight
Asian banks should have no problem complying with the new, higher capital requirements; it is the classification of capital types that may cause issues. With sovereign debt harder to come by in Asia than in Europe, Asian banks rely on other types of capital to be considered Tier I in order to fulfill Tier I capitalization requirements. Basel III is already raising the Tier I requirement to 6% from the 4% mandated by Basel II. If the types of assets that qualify as Capital I are narrowed as well, Asian banks may face greater Basel III compliance costs than they feel are warranted for their region.
The Royal Bank of Scotland plc. Registered in Scotland No. 90312. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. The Royal Bank of Scotland plc is authorised and regulated by the Financial Services Authority. The Royal Bank of Scotland N.V. is incorporated in the Netherlands. The Royal Bank of Scotland plc and The Royal Bank of Scotland N.V. are authorised agents of each other in certain jurisdictions.
Other effects of Basel III will be felt by FX traders around the world. As the agreement introduces higher capital requirements, limits leverage, and mandates clearing, costs will rise, and will be passed down to traders. Longer- dated Forex contracts are already being affected by the expected rise in costs.
34 | july 2012 e-FOREX
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