ISLA Insights News Feed
S. Korea to end 5-year stock short-selling ban
South Korea will fully lift its short-selling ban on domestic stocks on March 31 for the first time in five years. The Financial Services Commission cited recent improvements and policy efforts in addressing concerns about fair pricing. Since reimposing the ban in November 2023, authorities have investigated illegal trades by foreign banks, developed a detection system and implemented regulatory changes to create a level playing field. Reuters (21 Mar.) Read more
27 Mar 2025
Turkey bans short-selling amid market stress
Turkey's capital markets regulator has banned short-selling across all stocks and eased share buyback rules to stabilize the market after the benchmark index fell following the arrest of an opposition leader. The new measures allow companies to repurchase shares above the last market close and reduce the minimum equity capital requirement for margin trading from 35% to 20%. Bloomberg (23 Mar.) Read more
27 Mar 2025
US Treasury narrows corporate transparency rules to foreign firms
The Treasury Department has issued interim final regulations under the Corporate Transparency Act, limiting beneficial ownership reporting to foreign companies only. The original disclosure requirements, which took effect in 2024, faced legal challenges and required millions of companies to disclose ownership information to prevent money laundering and other crimes. The new rules exempt US citizens and domestic companies from penalties for non-reporting, and set new deadlines for foreign entities to file reports. Bloomberg Tax (22 Mar.) Read more
27 Mar 2025
BoE eases stress test scenario for UK banks
The Bank of England has eased the crisis scenario for its 2025 stress tests, requiring banks to model a peak UK inflation of 10% and a 2% global GDP decline, compared with 12% and 3% last year. The test, now biennial, includes a 20% drop in world trade due to geopolitical tensions. Results will inform capital buffers and be published in the final quarter. Financial Times (24 Mar.) Read more
27 Mar 2025
Fed's NBFI scenario addressing credit, liquidity gaps
The Federal Reserve's exploratory scenario targeting nonbank financial institutions is seen as crucial due to its ability to address two significant vulnerabilities: credit stress and liquidity dependence. The scenario seeks to explore the indirect impacts of macroeconomic stress, providing crucial insights into systemic risks posed by NBFIs, which have rapidly grown in exposure over recent years. Risk (subscription required) (20 Mar.) Read more
27 Mar 2025
Hedge funds eye Treasury self-clearing ahead of SEC rule
Basis traders are exploring self-clearing US Treasury repo trades via internal affiliates to prepare for the Securities and Exchange Commission's upcoming clearing mandate. A sought-after inter-affiliate exemption would let hedge funds route trades through their own clearing entities, helping ease pressure on limited CCP capacity. Risk (subscription required) (24 Mar.) Read more
27 Mar 2025
Experts question need for mandatory Europe repo clearing
European regulators are considering a mandate for the central clearing of government bond repos, similar to measures that US authorities are introducing, aimed at reducing systemic risk. However, industry experts argue that such a mandate may be unnecessary in Europe, where 60% of repo trades are already cleared according to European Central Bank data. Concerns include potential market distortions and cost implications for buy-side firms. Risk (subscription required) (27 Mar.) Read more
27 Mar 2025
On-chain capital markets reshape global finance
The integration of traditional finance and blockchain is becoming a reality, with blockchain-based capital market infrastructure enhancing efficiency, liquidity and interoperability. Tokenization could significantly expand liquidity and capital efficiency, with only $25 trillion of securities currently eligible for collateral use out of a potential $230 trillion. Circle's recent initiatives, including the launch of USDC on the Canton Network, demonstrate the potential for 24/7 on-chain capital markets. World Economic Forum (25 Mar.) Read more
27 Mar 2025
CME tests Google Cloud blockchain for 24/7 trading
CME Group is collaborating with Google Cloud to test blockchain technology to enhance market infrastructure for 24/7 trading. The pilot includes payment solutions and asset tokenization using Google Cloud's distributed ledger. Markets Media (25 Mar.) Read more
27 Mar 2025
SEC targets clarity on crypto policy framework
Securities and Exchange Commission commissioners signaled a collaborative shift toward setting clearer crypto rules at the agency's first digital assets roundtable, with Acting Chair Mark Uyeda and Commissioner Hester Peirce highlighting efforts to define crypto classifications and issue guidance beyond enforcement. Peirce suggested NFTs could be next for regulatory clarity, as industry lawyers pressed for simpler frameworks to enable broader innovation. CoinDesk (UK) (21 Mar.) Read more
27 Mar 2025
ESMA criteria for CCP model changes may cause delays
The European Securities and Markets Authority has issued a draft regulatory technical standard under Emir 3.0 to distinguish between significant and nonsignificant model changes for central counterparties, aiming to speed up regulatory approvals. However, market participants are concerned that broadening the definition of significant changes could lead to delays, as more routine updates might require a longer approval process. Risk (subscription required) (27 Mar.) Read more
27 Mar 2025
Central matching key for Europe's T+1 settlement shift
The adoption of central matching platforms in Europe has lagged, akin to underinvestment in capital markets technology, raising concerns about settlement efficiency as the region moves toward T+1 settlement. Several providers offer solutions, making it crucial for firms to conduct due diligence to mitigate potential disruptions. Finadium (26 Mar.) Read more
27 Mar 2025
There is a point in every contest when sitting on the sidelines is not an option.
Dean Smith, college basketball coach Read more
27 Mar 2025
