OTC derivatives

Euro IRS, OTC derivatives, Wematch

Platform goes live with an initial group of 10 banks, including J.P. Morgan, RBC, HSBC and Societe Generale, which will match and negotiate Euro IRS curves, butterflies, and basis structures:…

Basel Committee and IOSCO announce one year delay on phase 5 margin implementation for OTC derivatives

July 23, 2019

Basel Committee, IOSCO, Margin, OTC derivatives, Phase 5, UMR

The Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO) acknowledge the progress that has been made to implement the framework for margin requirements for non-centrally…

Winners and losers from the Basel Committee’s Leverage Ratio changes on margin and window-dressing

July 1, 2019

Basel III, Regulatory

Basel Committee, Leverage Ratio, OTC derivatives, Repo, SA-CCR, securities financing transactions, topstory

The Basel Committee on Banking Supervision (BCBS) issued changes to the Leverage Ratio last week that will have impacts to the derivatives and securities finance industries. Like any regulation, this…

The Trade: Barclays to provide US client swaps clearing through Eurex

June 16, 2019

Barclays, Eurex, IRS, OTC derivatives

Barclays has confirmed that it has become the latest investment bank to provide its clients based in the US with access to Eurex for clearing of interest rate swaps. The…

Tradition picks Paris to “future proof” EU derivatives venue

June 13, 2019

Brexit, CLOB, OTC derivatives, Tradition

Trad-X’s dealer-to-client CLOB will be located in Paris, said a spokesperson for Tradition, the interdealer broking arm of Compagnie Financière Tradition: “Anyone who spends time, effort and money to onboard…

Bank of England blog: CCP porting, are there lessons to be learnt from elsewhere?

May 28, 2019

Bank of England, CCP porting, CCPs, OTC derivatives

Post-crisis regulatory reforms have reshaped and increased the amount of clearing activity in the OTC derivatives market. An emerging issue is so-called “client porting” – i.e. how central counterparties (CCPs)…

ISDA: Key Trends in the Size and Composition of OTC Derivatives Markets

May 20, 2019

ISDA, OTC derivatives

This paper analyzes recent trends in the size and composition of over-the-counter (OTC) derivatives markets, using the latest data from the Bank for International Settlements (BIS) and ISDA. According to…

BIS: OTC derivatives notional declines to $544 trillion, market value down to $9.7 trillion

May 5, 2019

Notional amounts of OTC derivatives declined from end-June to end-December 2018, from $595 trillion to $544 trillion. The market value of OTC derivatives fell from $10.3 trillion to $9.7 trillion,…

Eurex clears first swap transaction for U.S. end clients

February 11, 2019

Eurex, OTC derivatives, US

Eurex Clearing, one of the world’s leading central counterparties (CCP), has cleared its first swap transaction for end clients domiciled in the U.S. Citi is the first futures commission merchant…

ISDA: Key Trends in the Size and Composition of OTC Derivatives Market

December 10, 2018

ISDA, OTC derivatives

December 10, 2018 A new research paper has been posted on ISDA.org: Key Trends in the Size and Composition of OTC Derivatives Market This paper analyzes recent trends in the size and…

BIS says notional of OTC derivatives increases to $595 trillion but gross value declines to $10 trillion

October 31, 2018

OTC derivatives statistics at end-June 2018 The notional value of outstanding OTC derivatives increased from $532 trillion at end-2017 to $595 trillion at end-June 2018. This increase in activity was…

Eurex Clearing to expand Partnership Program to Repo and Foreign Exchange

October 26, 2018

Eurex Clearing, OTC derivatives, Repo

Eurex Clearing plans to expand its Partnership Program to cover the repo and OTC foreign exchange (OTC FX) segments. The design of the program extension is complementary to the OTC…

Introducing the Semantic Blockchain in Capital Markets

October 4, 2018

Narasimha Kodihalli

Big Data, Blockchain, Derivatives, Technology

CDM, Common Domain Model, ISDA, OpenRisk, OpenRisk Technologies, OTC derivatives, semantic blockchain, topstory

Technological advances have made a “Semantic Blockchain” feasible. This is the ability to map smart contracts on the blockchain to qualitative information about the underlying data. It’s a realistic solution…

CFTC Chairman Giancarlo Releases Cross-Border White Paper

October 1, 2018

CCPs, CFTC, OTC derivatives

Washington, DC – Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo released a white paper titled “Cross-Border Swaps Regulation Version 2.0: A Risk-Based Approach with Deference to Comparable Non-U.S.…

IOSCO issues policy measures to protect investors of OTC leveraged products

September 19, 2018

IOSCO, OTC derivatives, retail

The Board of the International Organization of Securities Commissions (IOSCO) today issued a final report providing measures for securities regulators to consider when addressing the risks arising from the marketing…

AcadiaSoft Launches Sensitivities Calculation Services

September 12, 2018

AcadiaSoft, OTC derivatives, SIMM

AcadiaSoft Inc., the leading provider of margin automation solutions worldwide, today announced that it is offering two new services to streamline the generation of inputs necessary for margin calculations using…

Rebuilding tri-party repo for an open architecture model

September 4, 2018

Giancarlo Novello

Custodians, Derivatives, Market infrastructure, Securities Lending, Tri-Party Repo

OTC derivatives, Repo, Securities Lending, SIX, topstory, tri-party

The tri-party repo market was initially developed in the US in the late 70s, early 80s to drive efficiency gains in settlement and reduce operational risks. It then moved across…

BoE paper: XVA pass-throughs mean bilateral IRS is more expensive than cleared

August 17, 2018

Bank of England, OTC derivatives, XVA

OTC premia Staff Working Paper No. 751 By Gino Cenedese, Angelo Ranaldo and Michalis Vasios Using trade repository data at transaction and ID levels, we provide the first systematic study…

FSB and standard-setting bodies consult on effects of reforms on incentives to centrally clear over-the-counter derivatives

August 7, 2018

Alex Tonhazy

central clearing, FSB, OTC derivatives

7 August 2018 The Financial Stability Board (FSB), the Basel Committee on Banking Supervision (BCBS), the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions…

FSB puts out call for budding UPI service providers

July 17, 2018

News and Notes – Fintech

FSB, G20, OTC derivatives, UPI

The Financial Stability Board (FSB) has published a questionnaire for prospective UPI Service Providers and is seeking responses from entities that wish to be designated by the FSB as a…

The BIS numbers on the size of the OTC derivatives market show continued declines in Gross Market Value

May 14, 2018

Jonathan Cooper

Central Counterparties, CFTC, Derivatives

BIS, CFTC, Gross market value, notional value, OTC derivatives, topstory

The Bank for International Settlements (BIS) recently released “Statistical release: OTC derivatives statistics at end-December 2017”. Just looking at notional values, the OTC derivatives market is little changed. But we…

IOSCO issues technical guidelines on critical data handling for OTC derivatives

April 9, 2018

CPMI-IOSCO, Data, OTC derivatives

A new report provides technical guidance to authorities on harmonized definitions, formats and usage of a set of critical data elements for over-the-counter (OTC) derivative transactions reported to trade repositories,…

CM2025: the physical market rebounds

It’s the year 2025. Following the passage of Dodd-Frank and related Basel III capital rules, banks did what they were supposed to do: they reduced Shadow Banking risk by cutting…

ISDA publishes APAC OTC derivatives study

November 15, 2017

Asia-Pacific, ISDA, OTC derivatives

Derivatives markets have grown markedly in Asia-Pacific in the past decade, with Hong Kong and Singapore now pre-eminent in regional trading of FX and interest rate derivatives (IRD). Total IRD…

Numerix: The case for electronification in OTC Markets, its evolution and future

August 23, 2017

News and Notes, News and Notes – Fintech

electronification, Numerix, OTC derivatives

The last decade has seen a significant uptick in electronic trading across a broad range of asset classes. This growth coincides primarily with the onset of three dynamics: the quest…

Finadium: Tri-party Repo in Asia: OTC Collateral Demand and Structural Change

July 18, 2017

Asia, Derivatives, Repo, Tri-Party Repo

Asia, Initial Margin, OTC derivatives, Repo, topstory, tri-party, Variation Margin

This Finadium research report evaluates the market conditions that are pushing Asian investors towards repo as a mechanism for obtaining cash that can be used as OTC derivatives collateral, especially…

ECB survey of credit terms, securities financing, and OTC derivatives: use of CCPs for government bonds on the rise

July 11, 2017

credit, ECB, OTC derivatives, securities finance, Survey

“Use of CCPs: banks reported that the use of CCPs for securities financing transactions had increased somewhat further over the three-month reference period for many types of collateral and both…

The FSB pushes hard on making trade reporting operational and legal (Premium)

July 10, 2017

Richard Stinchfield

Derivatives, EMIR, Financial Stability Board, Market infrastructure, OTC Derivatives Clearing, Regulatory, Systemic Risk

Financial Stability Board, legal data, OTC derivatives, Regulatory reform, topstory, trade reporting

The Financial Stability Board (FSB) has been busy, with 10 substantive letters and reports released in the run up to the recent G20 summit. For this article, we took a look…

IOSCO issues call for comments on harmonising OTC derivatives data elements

June 27, 2017

IOSCO, OTC derivatives

The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have today published for public comment a consultative report on Harmonisation of critical OTC derivatives data elements (other than…

Finadium report: The Challenge of Standardizing Collateral Schedules in OTC Derivatives

May 23, 2017

Central Counterparties, Collateral Management, Derivatives, Market infrastructure, OTC Derivatives Clearing

collateral management, CSAs, Finadium, OTC derivatives, topstory

A push/pull situation between dealers, ISDA and the buy-side has reached a new crescendo in recent months as Basel Committee/IOSCO rules have forced a large-scale repapering of bilateral Credit Support…

Fed blog: The Evolution of OTC Derivatives Markets

May 15, 2017

The 2007-09 financial crisis highlighted weaknesses in the over‑the‑counter (OTC) derivatives markets and the increased risk of contagion due to the interconnectedness of market participants in these markets. As a…

BIS: gross notional of OTC derivatives falls to US$483 trillion

May 10, 2017

Highlights from the BIS over-the-counter (OTC) derivatives statistics for the six months ending in December 2016: The increase in OTC derivatives positions that took place in the first half of…

Repealing Dodd-Frank: understanding the revised Financial CHOICE Act (Premium)

May 9, 2017

Derivatives, Dodd-Frank, US

Dodd-Frank, Leverage Ratio, OTC derivatives, repeal, topstory, US

The US House of Representatives Financial Services Committee recently passed a revised Financial CHOICE Act for discussion. This is the big Republican plan for repealing/replacing Dodd-Frank rules, including the proposed…

ECB survey results on conditions in euro-denominated securities financing and over-the-counter derivatives markets

April 25, 2017

credit, ECB, OTC derivatives, securities finance, Survey

Results of the March 2017 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets Less favourable non-price terms for secured funding and for non-cleared OTC…

HKEX: OTC Clear Launches Client Clearing Ahead Of Hong Kong Clearing Mandate

March 22, 2017

Clearing, HKEX, Hong Kong, OTC derivatives

OTC Clearing Hong Kong Limited (OTC Clear), a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX) that provides clearing and settlement services for over-the-counter (OTC) derivative transactions, has launched…

Taxation, transparency and blockchain

March 21, 2017

Richard Stinchfield

Bitcoin, Blockchain, Derivatives, Regulatory, SEC, Tax, US

bitcoin, blockchain, IRS, OTC derivatives, Regulatory, sec, topstory

Last week brought two pieces of news that focus attention on some of the regulatory challenges that blockchain-based public markets are up against. This has direct implications for trading in…

Margin Optimization and the Cost of the Trade

February 9, 2017

Central Counterparties, Collateral Management, Derivatives, Technology

CCPs, collateral optimization, Margin, Margin optimization, OTC derivatives, technology, topstory

Banks have largely absorbed the Leverage Ratio and the Liquidity Coverage Ratio and are taking on the next challenge: maximizing their balance sheet efficiency in a return to profitability. One…

Agent lenders and prime brokers could be “systematic internalisers” under MiFID II

February 1, 2017

Big Data, Europe, Regulatory, Repo, Securities Lending

ESMA, Europe, MiFID II, OTC derivatives, Repo, Securities Lending, structured finance products, systematic internaliser, topstory

ESMA has released an updated Q&A on MiFID II transparency and market structure topics. A central issue was how to define systematic internalisers and what their responsibilities are in the…

Finadium on Repealing Dodd-Frank: What’s Next for Derivatives and Securities Finance

January 4, 2017

Derivatives, Dodd-Frank, Regulatory, Repo, Securities Lending, US

Dodd-Frank, OTC derivatives, Regulation, securities finance, topstory, US

This Finadium report evaluates a tangible proposal currently on the table for repealing many of Dodd-Frank’s rules impacting bank balance sheets: the Financial CHOICE Act. Initially released in 2016, the…

IOSCO identifies risks to retail investors of OTC leveraged products

December 21, 2016

CFDs, IOSCO, OTC derivatives, retail

The International Organization of Securities Commissions (IOSCO) issued today a report that identifies various risks related to the marketing and sale of complex OTC leveraged products to retail investors, and…

ISDA analyzes BIS derivatives data, finds deficiencies

December 20, 2016

BIS, ISDA, OTC derivatives

A new ISDA Research Note has been posted on ISDA.org: Derivatives Market Analysis: Interest Rate Derivatives Twice a year, ISDA analyzes interest rate derivatives notional outstanding data reported by the Bank for…

Monetary Authority of Singapore white paper: Liquidity and Policy Analyses for Platform Trading of OTC Derivatives: A Perspective of Smaller Markets

December 19, 2016

Monetary Authority of Singapore, OTC derivatives, Singapore

This paper analyses the criteria for assessing when it might be appropriate to mandate the trading of standardised over-the-counter derivatives on trading platforms, in the context of smaller OTCD markets.…

AcadiaSoft steps up with ProtoColl acquisition; is this the next Markit? (Premium)

November 22, 2016

Collateral Management, Technology

AcadiaSoft, collateral management, DTCC, OTC derivatives, ProtoColl, topstory

AcadiaSoft announced a major purchase yesterday of DTCC’s ProtoColl solution. This is a big step forward for AcadiaSoft, which only last August 2015 transformed itself from an important technology hub…

Finadium report: banks say Asia's biggest OTC challenge is margin reform and effective collateral management

October 25, 2016

Asia, Basel III, Collateral Management, Derivatives

Asia, banks, Basel III, OTC derivatives, Regulation, topstory

Finadium has released a new research report, “The Future of Asian OTC Derivatives Markets,” a survey of 13 major bank participants in Hong Kong, Singapore and Australia and other countries…

Uneven convergence in securities finance businesses is creating opportunities

October 18, 2016

Paul Amery

Delta One, Derivatives, Prime Brokerage, Repo, Securities Lending

convergence, Delta One, Equity Swaps, OTC derivatives, Repo, Securities Lending, silos, Synthetic Finance, topstory

The maintenance of silos and uneven rates of convergence between functionally similar but separate business areas at banks has created new opportunities for the buy-side. Continue reading

Do CCPs increase dealer capacity? Sometimes but not always (Premium)

October 5, 2016

Richard Stinchfield

CCP, Central Counterparties, Collateral Management, Derivatives, Market infrastructure, Repo, Securities Lending

bank capital, CCP, collateral, OTC derivatives, Repo, Securities Lending, topstory

At a recent industry conference, one of the speakers offered the opinion that Central Counterparties (CCPs) increase dealer capacity. Like most broad statements it is generally true but we heard this…

Survey results: are OTC derivatives, securities lending and repo converging in Asia? (Premium)

September 27, 2016

Asia, Derivatives, Repo, Securities Lending

Asia, convergence, OTC derivatives, Repo, Securities Lending, topstory

A recent survey conducted by Finadium in cooperation with Deriv Asia shows that Asian banks are looking closely at the reality of product convergence across OTC derivatives, securities lending and…

US Congress could repeal Dodd-Frank's OTC derivatives rules but increase the Leverage Ratio (Premium)

September 19, 2016

Basel III, Derivatives, Dodd-Frank, Regulatory, US

Basel III, Dodd-Frank, OTC derivatives, Repo, safe harbor, topstory, US

The US House of Representatives has proposed regulation that would effectively repeal Title VII of Dodd-Frank, the part that deals with OTC derivatives. This would undue years of rule-making. There…

New ISDA Whitepaper Urges Greater Standardization and Efficiency in Derivatives Market Infrastructures

September 16, 2016

infrastructure, ISDA, OTC derivatives