Capital Markets, Financial

BGC Partners eyes new platform to trade US Treasuries

BGC Partners plans to launch a new platform to trade US Treasuries early next year, in a bid to return to a market in the middle of evolution, according to people familiar with the plans.  The company, spun out of Howard Lutnick’s Cantor Fitzgerald in 2004, sold eSpeed, the second-largest interdealer platform for trading Treasuries, […]

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Sales in Rocket Internet’s portfolio companies rise 30%

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Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Categorized | Banks

CFTC fines Barclays over energy deals

Posted on September 22, 2016

Barclays 'regret' over memo...File photo dated 16/09/13 of a view of a branch of Barclays. The bank has spoken of its "regret" over a memo suggesting its branches switch their television channels to entertainment shows as news broke of the banking giant's pay and bonuses. PRESS ASSOCIATION Photo. Issue date: Friday March 7, 2014. The bank reportedly recommended that staff turn on E4 or lifestyle channel Really, or switch off their televisions ahead of "negative coverage" about Barclays' annual report which revealed nearly 500 staff were paid at least £1 million each last year. See PA story CITY Barclays. Photo credit should read: Dominic Lipinski/PA Wire©PA

The main US derivatives regulator has fined Barclays over its record keeping for thousands of energy and metals deals, in the first enforcement action after a sweeping inquiry into the hybrid transactions.

Barclays was ordered to pay a $500,000 penalty for failing to create, maintain and promptly produce confirmations for trades called exchanges for related positions, or EFRPs.

    The Financial Times reported in May 2013 that the Commodity Futures Trading Commission had called on Wall Street banks and other traders to provide evidence that their derivatives transactions known as “exchanges of futures for swaps”, a type of EFRP, were legal.

    Under such a transaction, two parties execute an off-exchange swaps transaction, and instantly convert it into a futures contract. At the time, regulators were concerned that traders were structuring these two-step deals to avoid the transparency required by exchange trading.

    The CFTC on Thursday said Barclays entered into at least 3,717 metals and energy EFRP trades from at least September 2009 to October 2012. The latter month is when CME Group and Intercontinental Exchange relisted most of their over-the-counter energy swap contracts as futures in response to the Dodd-Frank financial reforms.

    But Barclays, one of Wall Street’s biggest commodities dealers, did not maintain and could not produce confirmations for at least 1,358 of the trades, breaking a CFTC rule, the agency said. It took Barclays almost 14 months to find and produce confirmations for the remaining metals and energy trades, the CFTC said. Barclays declined to comment.

    At the time of the initial inquiry, large commodities traders expressed worry they would be caught in a dragnet over a manner of trading many had viewed as legitimate. The Barclays trades were entered on ClearPort, CME’s platform for transferring the risk of over-the-counter derivatives to its clearing house. ClearPort was invented in 2002 after the energy trader Enron collapsed and fears of counterparty default spread through power and gas markets.

    The record keeping fine for Barclays might bring relief to other traders subject to the CFTC’s earlier inquiry, suggesting the agency views the lack of trade confirmations as a paperwork problem rather than a more extreme violation of trading rules.

    After the inquiry began, the CFTC warned CME in August 2013 that its procedures for EFRP transactions were “inadequate and require significant and prompt improvement”. CME and other exchanges now regularly discipline market participants for EFRP infractions.