New Turrets Help Société Générale Meet U.S. Voice Regs
Société Générale’s deployment of trading turrets, recording services and a trading network infrastructure will help the New York branch of the bank meet U.S. regulatory requirements for the capture and retention of voice communication, including mobile calls, says Lionel Grosclaude, CEO at Etrali Trading Solutions, maker of the Open Trade telephony and related services.The global installation began in New York in August and will continue with the bank’s new Paris trading floor going live with the turret systems this month, say Etrali officials.
Deployments for Société Générale’s Frankfurt, Milan, Madrid, Luxembourg trading floors are slated for the first quarter of next year, bank and Etrali officials say. The rollout will include links to Etrali’s Trading Community Services network, TCSnet.
The rollout for the New York trading floor will help Société Générale comply with the Dodd-Frank trade retention regulation via support for data from dealer boards and mobile systems, individual trader and counterparty searches, and the retrieval of calls for investigations, say Etrali officials.
The Open Trade systems are being integrated with Société Générale’s recording environment, which allows calls to be regionally located for compliance purposes. The new turret system has “a pure IP architecture” that will facilitate the trading telephony integration with “our existing business software tools,” says Bertrand Lemarignier, global chief technology officer of Société Générale Group, in a statement. The rollout involved Etrali staff and Société Générale’s IT and sourcing departments. “We continue to work with them, designing global Open Trade topologies to provide enhanced collaboration and mobility between our trading floors,” Lemarignier says.
The system will also support the CFTC’s requirement to retain voice calls for a year and the CFTC stipulation that firms be able to reconstruct pre- and post-trade communication and the conversations behind a transaction, say Etrali officials.
The turret implementation also supports Société Générale’s European Market Infrastructure Regulation (EMIR) directives regarding requirements for the reporting of derivative transactions and how they are traded, Grosclaude says.
“Some transactions are now required [via EMIR] to be cleared by a central counterparty clearinghouse (CCP) and they cannot be cleared over the counter and they must know which transactions need to be cleared this way,” Grosclaude says. “It also requires them to implement new risk management standards that will be applied to trades and entire trading portfolios.”
One of the drivers for the turret upgrade was Société Générale’s efforts to better serve its buy-side clients.
“Sell-side firms must be seen to be compliant in order to win business from the buy side,” Grosclaude says. “Due diligence by the buy side has been increased — they will no longer risk their investments with firms that are not fully compliant.
Société Générale officials were unavailable for further comment.
ICE to Shut Down New York Portfolio Clearing
IntercontinentalExchange Group (ICE) will be shutting down New York Portfolio Clearing (NYPC) and moving the clearing of interest rate futures listed on NYSE Liffe U.S. to ICE Clear Europe, officials say. This move, in conjunction with the DTCC, will centralize the trading and clearing of ICE’s global interest rate product portfolio, and will yield efficiency benefits for customers.
The centralization of clearing services for global interest rate futures will help ICE offer customers “significant capital and infrastructure efficiencies at a critical time,” says Lynn Martin, CEO, NYSE Liffe U.S. and CEO, NYPC, in a statement. Martin will serve as the CEO of NYPC through the transition and the wind down of its offerings; NYPC has been in existence since March 2011
The move follows ICE’s completion of its takeover of NYSE Euronext, which owns NYSE Liffe, in mid-November. With the finalization of the acquisition, ICE will be separating Liffe from Euronext, according to Jeffrey C. Sprecher, chairman and CEO of ICE, who spoke in recent remarks to media and investors.
“There is a detailed work plan underway and we anticipate completing the separation work in the first half of 2014,” Sprecher says. “There have been significant conversations with regulators and we’ve shared our vision with them. However, there will be ongoing regulatory approvals required as we undergo this complex reorganization which must occur before any Euronext separation can take place.”
ICE wants to integrate Liffe with ICE Futures Europe, its London-based futures exchange, and operate the combination as a single subsidiary. “ICE Futures Europe will offer a full range of interest rate, agricultural, energy, emissions and index futures and options, creating a multi-asset class exchange for global markets, while retaining its London base of operations,” Sprecher says.
The operations of NYPC will be gradually shut down and open interest will be transferred by the third quarter of 2014, subject to regulatory approval, officials add. In addition to the Big Board, ICE now includes ICE Futures, Liffe and Euronext.
As part of the transition, ICE has assumed NYSE’s license for futures on the DTCC GCF Repo Index, officials say. In addition, ICE and DTCC are in discussions about a new cross-margining solution that would offer “capital efficiencies across a broader range of global interest-rate products,” according to a statement from ICE and the DTCC. The DTCC GCF Repo Index was launched in July 2012 and targets banks, hedge funds and asset managers.
The two will combine efforts to bring “benefits and cost savings” in cross-margining to mutual clients and the industry at large, says Murray Pozmanter, managing director and general manager for Clearing Services at the DTCC in a statement.
ESMA Approves CME European Trade Repository
The CME Group has gotten official blessings for its CME European Trade Repository from the European Securities and Markets Authority, which is implementing the mandates of the European Market Infrastructure Regulation (EMIR), officials say.
The CME Group’s London-based multi-asset European trade repository will take trade submissions across all mandated derivative asset classes including interest rates, FX, credit, commodities and equities, officials say. It will accept cleared and non-cleared, bilaterally settled, over the counter and exchange-traded derivatives executed via venues across the globe. The repository data will be made available to the reporting entity itself, regulators, supervisors and authorities.
The new repository and the CME Swap Data Repository in the US will allow CME Group to provide global and regional multi-jurisdictional reporting services, says Jonathan Thursby, president of CME Global Repository Services. The CME Group will also offer a delegated reporting service to help EU customers comply with EMIR.
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