News Column

Impact of derivatives legislation from EMIR and Dodd–Frank Act

May 19, 2014

With Dubai increasing its importance as a regional and international financial centre, the seminar was attended by heads of treasury operation, compliance managers, internal audit professionals, chartered accountants and finance professionals. The seminar focused on the important regulatory mechanisms that have been put in place with regard to the US legislation, the Dodd-Frank Act, along with the similar European regulations contained within the European Market Infrastructure Regulation (EMIR). There was a particular focus on the impact of these two items of legislations on derivatives trading and markets within the GCC region.

The presentations were delivered by Karim Aziz and Bilal Hasanjee, who covered the EMIR and Dodd- Frank topics, respectively. The seminar briefed attendees about the nature of regulatory requirements being published by both local and international regulators on different kinds of derivative products currently being traded by market participants.

Karim Aziz's paper, EMIR Regulatory Framework - Mitigation of Systemic Risk, explained the differences between both the EU and the US regimes. He also shared information about the mandatory clearing and key compliance requirements.

Bilal Hasanjee's presentation entitled Dodd-Frank Act - US Regulatory View, reviewed Title VII of the Act - 'Wall Street Transparency and Accountability', defined 'Swap' as per the Title VII, and explained the segregation of swap activities. Hasanjee discussed the swap markets regulation, with subtopics such as impact on Middle East-based institutions, registration and regulation of swap dealers, capital and margin requirements, and business conduct rules. He also talked about the regulation of security-based swap markets, extraterritorial issues, and implications for GCC players.

Ahmed Al-Maqtari, a leading finance professional emphasised the need for a timely implementation by relevant market participants. Mohammed Ahmed Khan, Director of Business Development for A&Z Management Consultants stated, "At a time in which many parts of the world are suffering from economic downturns and austerity, Dubai's economy is blooming. This is reflected in the growth in value of the Emirate's housing stock, with average house prices increasing 33 per cent in the last financial year alone. This will be a contributor to the projected growth in the Dubai economy of nearly five per cent for the fiscal year; an excellent achievement in the existing economic climate. Attracting such prestigious seminars to Dubai can only assist in the process of economic prosperity, help contribute to what is become a knowledge- based economy and support Sheikh Mohammed's recent initiative related to the global finance economy. It is clear that this marketplace has huge potential with a worth of eight trillion dollars (AED 29.4 trillion) and with a consumer base of 1.6 billion Muslims worldwide."

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Source: Banker Middle East

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