Data Management

10:44 AM
Justin Grant
Justin Grant
Commentary
Connect Directly
Google+
Twitter
RSS
E-Mail
50%
50%

Nasdaq Fights Bank "Cartels" in Battle for Clearinghouse Control

Nasdaq OMX Group is quietly working the back channels of the nation's capital to limit banks' "cartel-like control" of clearinghouses as Wall Street braces for final word on how the $600 trillion swaps market will function.

Nasdaq OMX Group is quietly working the back channels of the nation's capital to limit banks' "cartel-like control" of clearinghouses as Wall Street braces for final word on how the $600 trillion swaps market will function.

Part of the exchange operator's rationale is that if its own clearinghouse is to thrive in the long run, it'll need to keep banks as customers, according to Bloomberg News. So in order to do so, Nasdaq OMX has been quietly lobbying Congress and the Commodity Futures Trading Commission.

The firm even went as far as to hire the ex-chairman of the House Financial Services Committee to lobby former colleagues, Bloomberg reports.

From Bloomberg:

"Unions and investor advocates say that banks' near-monopoly has driven the prices of derivatives higher for everybody. More transparency in those markets will lower the costs for all companies buying derivatives, which in turn will bring down the costs not only of financial products but consumer goods based on agricultural or energy commodities - everything from loaves of bread to gallons of heating oil or gasoline.

"What the progressives are concerned about here is the ongoing control of clearinghouses by institutions that are making money by keeping things opaque," said Heather Slavkin, a lobbyist for the AFL-CIO.

Nasdaq lost the first round of the regulatory battle this year when Congress decided not to set caps on clearinghouse ownership, passing the decision on to regulators - the CFTC as well as the Securities and Exchange Commission."

As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio
Comment  | 
Print  | 
More Insights
More Commentary
Driving Information Security, From Silicon Valley to Detroit
As software interacts with more and more of our daily lives, technology providers may be liable for more damages than they have in the recent past.
Big Data's Challenge: Matching Business Needs With Technology
All those bits and bytes only add up to something when they’re organized, arranged, and made coherent.
Single Source, Many Truths
If the data quality is not at fault, why then might departments reject the data? The answer is that there are two aspects to data quality: factual correctness and contextual correctness.
Predictions Come True as Regulators Swoop
While two out of the five capital markets predictions from July have already come true, let's hope that all five don't actually happen.
IBOR Before It Was "IBOR"
While its catchy new nomenclature and explosion in popularity has given the outside world an impression that it is novel, the same conversations about it were happening twenty years ago. So why then is IBOR the latest buzz word for firms today?
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - July 2014
In addition to regular audits, the SEC will start to scrutinize the cyber-security preparedness of market participants.
Video
5 Things to Look For Before Accepting Terms & Conditions
5 Things to Look For Before Accepting Terms & Conditions
Is your corporate data at risk? Before uploading sensitive information to cloud services be sure to review these terms.