Wall Street, trying to preserve profits from swap trading in theface of tougher scrutiny from Washington, has found a new way tokeep some of its overseas deals private. It's called Footnote513.

Banking lawyers have seized on the wording of the footnote,contained in an 84-page policy statement issued in July by the mainU.S. regulator of derivatives. The largest banks told swap brokersin late September that the language means certain swaps still don'tfall under the agency's new trading rules, according to threepeople briefed on the discussions.

London-based ICAP Plc, one of the largest swap brokers, told thebanks it didn't agree with their interpretation, said the people,who spoke on condition of anonymity because the discussions weren'tpublic. Other brokers accepted the banks' position and have beentrading billions of dollars in contracts outside the new regulatorysystem, the people said.

Continue Reading for Free

Register and gain access to:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world cas studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.