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
The Bankerless Bank
Regulatory upheaval has distracted banks from developing innovative technology. When will banks return their focus to building technology for competitive advantage?
4 Factors Driving Enlightenment & Big-Data Adoption in Regulatory Compliance
Whether seeking to maintain compliance or to drive business value, emerging technologies can unleash tremendous potential.
The Art of Leveraging Governance, Risk & Compliance Technology Tools
Eliminating compliance risk across information channels is a constantly transforming task. Ongoing auditing and auto-corrective technology can increase trust, accountability, and transparency.
The FSB's Swaps Data Aggregation Report, a Technical Review
The Report discusses legal, technological, and regulatory issues to be resolved in order to obtain a complete view of swap transactions around the world.
Raising the Data Management Stakes
Data management can get firms only so far. Advanced data analytics is needed for all business lines and for calculating risk, especially with BCBS 239 on the horizon.
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.