TABB releases report on OTC clearing technology
(Thomson Reuters ONE) -
Huge demands for technology upgrades as global regulators focus on the clearing
of OTC derivatives.
TABB Group has released a report on the challenges caused by OTC derivatives
reforms which, according to TABB principal Kevin McPartland, "are causing
headaches all over Wall Street, the City and beyond".
According to the report "OTC Derivatives Clearing Technology: Bringing the Back
Office to the Forefront", regulators' focus on the clearing of OTC derivatives
has started a technology revolution. There is a need for major upgrades and
investments in clearing technology to cope with an estimated twentyfold increase
in transaction volumes and demands for lower processing latencies within
clearing. There will also be increased complexities in margin requirement
calculations, and finding offsets within portfolios to reduce margin
requirements, straining systems further.
The study looks at the impacts that new regulation will have on clearing
technology for sell-side firms and clearing houses, the cost of implementing the
technology for real-time clearing and intra-day margin calls, and presents a
view of the new clearing workflow.
"This report captures highly relevant and urgent issues that the clearing
industry faces today," comments Nils-Robert Persson, Executive Chairman of
Cinnober. "Pressure from regulators and market participants has made it clear
that the current post-trade infrastructure doesn't cope with many of the
challenges that we're facing today, in terms of calculation complexity, speed
and transaction volumes."
"We've been involved in sophisticated clearing solutions for over a decade, but
increased our focus three years ago as it became evident after the Lehman crash
that not having real-time control of positions and risks should be against the
instinct for self-preservation of any participant in our markets," Persson
continues. "The key characteristics of our offering in this area are flexibility
and scalability that enable true real-time clearing and risk management over
multiple asset classes. Technology is an enabler and must never become a
bottleneck in the development of efficient and secure services".
"Real-time clearing of a broad range of OTC products will happen," McPartland
says, "since market participants and regulators demand it and innovative
technologists will guarantee it. These improvements will come in phases,
paralleling regulatory rollout and growth in clearing volumes. The first phases
are underway and clearinghouses and dealers understand the winners will be those
who can consume and disseminate data elements critical to trading, clearing and
reporting in the least amount of time. But technology is the key catalyst
behind the elimination of existing inefficiencies, reduction of expensive manual
resources and lowering of operational risk."
The report is based on interviews with clearinghouses, swap dealers, technology
providers and buy-side clearing specialists. Authors are TABB's Kevin
McPartland, director of fixed income research and senior contributing analyst
Finn Christensen.
To get a copy of the released report, please e-mail
otc-clearing(at)cinnober.com.
For further information, please contact:
Nils-Robert Persson
Executive Chairman
Cinnober Financial Technology AB
Tel. +46 70 552 52 28
nils-robert.persson(at)cinnober.com
Martin Rabkin
TABB Group
Tel: +1 914-420-5739
mrabkin(at)martinrabkinink.com
About Cinnober Financial Technology
Cinnober provides mission-critical solutions and services to leading trading and
clearing venues. Cinnober's solutions are based on the TRADExpress(TM) Platform
incorporating everything needed for mission-critical solutions in terms of
performance, robustness and flexibility. The portfolio of offerings includes
price discovery and matching, real-time risk management, clearing and
settlement, data distribution and surveillance. Cinnober's customers include
Alpha Trading Systems, Borsa Italiana, Burgundy, Chicago Board Options Exchange,
Deutsche Börse, EDX London, Eurex, Hong Kong Mercantile Exchange, London Metal
Exchange, Markit BOAT, NYSE Liffe and Quadriserv. For additional
information, please visitwww.cinnober.com.
About TABB Group
TABB Group is the financial industry's only strategic advisory and research firm
focused solely on capital markets. Founded in 2003 and based on the proven
interview-based research methodology of "firstperson knowledge" developed by
founder Larry Tabb, TABB Group analyzes and quantifies the investing value chain
from the fiduciary, investment manager, broker, exchange and custodian, helping
senior business leaders gain a truer understanding of financial markets issues.
For more information, visit www.tabbgroup.com.
In January 2010, TABB Group launched TabbFORUM, the online community currently
with more than 8,500 capital markets members, drawn from buy-side and sell-side
firms, exchanges, regulatory agencies, academia, consultants, vendors and media,
focusing on issues covering current industry-wide topics.
Press release:
http://hugin.info/139660/R/1550633/477429.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Cinnober via Thomson Reuters ONE
[HUG#1550633]
Unternehmensinformation / Kurzprofil:
Datum: 29.09.2011 - 09:36 Uhr
Sprache: Deutsch
News-ID 69869
Anzahl Zeichen: 6220
contact information:
Town:
Stockholm
Kategorie:
Business News
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