OTC derivatives

EMIR, ESMA, OTC derivatives

The European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs), in response to the COVID-19 outbreak have published joint draft Regulatory Technical Standards (RTS) to amend the Delegated Regulation on…

DSB consults on data enhancement, functionality and dispute resolution

May 1, 2020

News and Notes – Fintech

ANNA, artificial intelligence, data management, DSB, OTC derivatives

The Derivatives Service Bureau (DSB) announced more detail on the 2020 Industry Consultation, highlighting the needs of new and existing users. The DSB was founded by the Association of National…

The door opens for an SA-CCR in securities finance

January 16, 2020

Derivatives, Pro-cyclicality, Regulatory

ESRB, Margin, OTC derivatives, SA-CCR, securities finance, topstory

The European Systemic Risk Board published last week an innocuously titled document called “Mitigating the procyclicality of margins and haircuts in derivatives markets and securities financing transactions“. The early pages,…

We size the global collateral markets at $19.8 trillion (Premium)

January 7, 2020

CCP, Collateral Management, Derivatives, Repo, Securities Lending

collateral, OTC derivatives, Repo, Securities Lending, topstory

Finadium conducted a market sizing exercise of the global collateral markets, including a diversity of collateral product types held by private sector market participants. Here’s what we found. Continue reading

Bank of England: Simulating liquidity stress in the derivatives market

December 22, 2019

Bank of England, collateral calls, Margin, OTC derivatives, Repo

By Marco Bardoscia, Gerardo Ferrara, Nicholas Vause and Michael Yoganayagam We investigate whether margin calls on derivative counterparties could exceed their available liquid assets and, by preventing immediate payment of the…

Northern Trust expands OTC derivatives collateral services

December 17, 2019

collateral management, Northern Trust, OTC derivatives

Northern Trust (Nasdaq: NTRS) is expanding its collateral management services for over-the-counter (OTC) derivatives trading. The new functionality will enable asset managers and institutional investors to outsource key aspects of…

Webinar: Introduction to Collateralized Transactions for Students and New Professionals

December 17, 2019

Finadium Event

OTC derivatives, Repo, Securities Lending, topstory

January 15, 2020 10AM New York 3PM London 4PM Paris/Frankfurt In this free public webinar, Finadium will deliver an overview of repo, securities lending and OTC derivatives collateral activity, linked…

ESMA values EU derivatives market at €735TN

December 10, 2019

ESMA, OTC derivatives

The European Securities and Markets Authority (ESMA) the EU’s securities regulator, today publishes its second Annual Statistical Report (Report) analysing the European Union’s (EU) derivatives markets. The Report, based on…

ISDA: Key Trends in the Size and Composition of OTC Derivatives Markets in the First Half of 2019

November 27, 2019

ISDA, OTC derivatives

The latest data from the Bank for International Settlements (BIS) over-the-counter (OTC) derivatives statistics shows that OTC derivatives notional outstanding increased in the first half of 2019 compared with the…

BIS: Notional amounts of OTC derivatives rose to $640 trillion at end-June 2019

November 8, 2019

OTC derivatives statistics at end-June 2019 Notional amounts of OTC derivatives rose to $640 trillion at end-June 2019. This is up from $544 trillion at end-2018 and the highest level…

US regulators propose to end IM for inter-affiliate transactions

October 28, 2019

Initial Margin, inter-affiliate transactions, OTC derivatives, US

Five federal agencies today announced a proposal to change the swap margin rules to facilitate the implementation of prudent risk management strategies at certain banks and swap entities. The swap…

FSB publishes UPI guidelines for Q3 2022 implementation

October 9, 2019

News and Notes – Fintech

CPMI-IOSCO, FSB, LEIs, OTC derivatives, Trade repositories, UPIs

The Financial Stability Board (FSB) has published a report on the governance arrangements for the globally harmonized Unique Product Identifier (UPI). The UPI will uniquely identify the product involved in…

IOSCO and BIS report on governance arrangements for critical OTC derivatives data elements

October 9, 2019

CPMI, IOSCO, OTC derivatives, Trade repositories

G20 Leaders agreed in 2009 that all over-the-counter (OTC) derivatives contracts should be reported to trade repositories (TRs) as part of their commitment to reforming OTC derivatives markets with the…

BIS releases triennial Central Bank Survey of Foreign Exchange and Over-the-counter (OTC) derivatives markets for 2019

September 18, 2019

BIS, FX, OTC derivatives, triennial central bank survey

The BIS Triennial Central Bank Survey is the most comprehensive source of information on the size and structure of global foreign exchange (FX) and over-the-counter (OTC) derivatives markets. The Triennial…

Eurex Clearing launches incentive program to support Brexit preparations

September 9, 2019

Brexit, Eurex Clearing, OTC derivatives

Eurex Clearing introduces a CCP Switch Incentive Program until year-end 2019 to support market participants in migrating OTC interest rate derivatives positions. Regulators and central banks have recently renewed their…

Moscow Exchange’s OTC derivatives market migrates to Unified Collateral Pool

July 30, 2019

collateral, MOEX, Moscow Exchange, OTC derivatives

MOEX’s Standartised OTC Derivatives Market migrated to the Unified Collateral Pool, allowing securities to be posted as collateral for trades on the market. The Unified Collateral Pool model delivers cross-market clearing…

Wematch launches Euro Interest Rate Swaps matching and negotiating platform for banks

July 25, 2019

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

CCP, 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

CCP, 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