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
5 Tips On How To Prepare For A Data Breach
If you are a financial institution your cyber security defenses will be breached -- again and again. Here are five tips to respond quickly and minimize damage.
Wall Street CIOs Have a Vendor Management Problem
If Wall Street CIOs want to stay ahead of competition and ensure high-speed trading software doesn't start the next flash crash, they need better insight into vendor delivered software.
Technology Innovation Returns to Financial Services
Capital Markets Outlook 2015: Following a few years dominated by regulatory compliance and cost saving technology initiatives, financial organizations are finally investing in innovative technology and tools.
Voice Biometrics Improve Transaction Monitoring Fraud Detection
Why voice biometrics should be a part of your fraud prevention strategy in the call center.
Fintech Fast Forward 2015
What will shape the future of Fintech in 2015 and beyond?
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - Elite 8, October 2014
The in-depth profiles of this year's Elite 8 honorees focus on leadership, talent recruitment, big data, analytics, mobile, and more.
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.