MiFID Commodity Review Update

Specialized commodity firms were given exemptions from the Market in Financial Instruments Directive (MiFID), pending reviews of the appropriate licensing and capital regimes for these firms. These reviews are currently underway. The MiFID is expected to be implemented in November.

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Retail Structured Products

ISDA issued a jointly sponsored exposure draft of Principles relating to retail structured products (RSP) at its AGM in April. The Principles are a conscious assertion of industry responsibility for ensuring that duties in relation to such products are clearly and logically allocated to the various parties that may be involved in their generation and sale. The key distinction is between those firms that directly face customers (and therefore retain the associated responsibilities) and those firms that deal only with the customer-facing firm (and only owe that firm duties). This distinction is relevant across a range of jurisdictions, even though the specific details of compliance rules may vary between those jurisdictions.

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CDS on CDO Transactions

ISDA published a draft Standard Terms Supplement for CDS on CDO Transactions June 6. This Supplement supersedes the form that ISDA published on June 7, 2006 and it coincides with various provisions to the Pay As You Go form that was published on April 5. The Standard Terms Supplement also offers a new Annex B on Interest Shortfalls.

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