Technology shouldn't be a limiting factor in creating efficient, safe and sound derivatives markets
(Thomson Reuters ONE) -
Cinnober responds to EC's Public consultation on derivatives and market
infrastructures-much to be won by using modern technology as an enabler.
On October 20 2009,( )the commission adopted the Communication "Ensuring
efficient, safe and sound derivatives markets - Future policy actions". These
policy actions foresee legislation mandating central counterparty (CCP) clearing
for a wide scope of eligible derivatives contracts, mandating reporting of OTC
derivatives to trade repositories (TRs) and establishing the requirements that
CCPs and TRs need to comply with to ensure their safety, soundness and
efficiency.
The Commission is now in the process of finalizing its draft legislative
proposals. Before doing so, it needs to finalize its views on four specific
issues described in the EC discussion paper: "Public consultation on derivatives
and market infrastructures":
I. Clearing and risk mitigation of OTC derivatives
II. Requirements for Central Counterparties
III. Interoperability
IV. Reporting obligation and requirements for Trade Repositories
As supplier of trading and clearing technology, Cinnober has submitted a
response to the consultation, stressing the importance of not being colored by
constraints presented by current technology in the derivatives CCPs when setting
out directions for future efficient, safe and sound markets.
Cinnober's standpoint is that the proposed legislation should, where possible,
motivate the clearing industry to adopt flexible, real-time systems. By doing
so it would enhance the industry's ability to handle more types of contract and
would enable it to manage the risks of high frequency trading much more
effectively.
"We see the outcome of this work as very important for the future effectiveness
and soundness of the European derivatives markets. For too long there has been
too little investment in post-trade infrastructure" Jan Arpi, CEO of Cinnober
says. "It is crucial that clearing houses equip themselves with fast, flexible
information technology which can be adapted at the rate that the financial
industry innovates. It's therefore important to not limit legislation to what's
possible to do with the technical solutions running in clearing houses today.
Innovation and technical development in this industry will be crucial to make
the market more secure and efficient."
During the development of the company's real-time clearing solution, the company
has consulted widely with the industry and regulators about the facilities
required in a modern CCP system in the post-financial crisis era.
"Hopefully a lot will be achieved by leaving it up to competition between
clearing houses. Those with an innovative approach and good technology will be
commercially motivated to clear as many types of contracts as possible if
authorities are willing to mandate clearing", says Nils-Robert Persson,
Executive Chairman of Cinnober and previously deputy CEO for the OM Group (now
part of Nasdaq OMX) with responsibility for all the exchanges and clearing
houses in the group.
Cinnober's response to the public consultation can be downloaded at
www.cinnober.com and will be published on the Commission website together with
all received responses.
For further information, please contact:
Jan Arpi
CEO, Cinnober Financial Technology AB
Tel. +46 70 860 46 49
About Cinnober Financial Technology AB
Cinnober provides mission-critical solutions and services to leading exchanges
and trading venues. Based on TRADExpress - a scalable, high-performance,
low-latency platform for transaction processing - Cinnober delivers flexible
solutions for trade execution, real-time clearing, price discovery and data
distribution. TRADExpress is 100% Java based, enabling solutions that are
flexible, as well as hardware- and database-independent. For additional
information, please visit www.cinnober.com.
[HUG#1430939]
Press release (PDF): http://hugin.info/139660/R/1430939/377487.pdf
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Source: Cinnober via Thomson Reuters ONE
Unternehmensinformation / Kurzprofil:
Datum: 12.07.2010 - 10:01 Uhr
Sprache: Deutsch
News-ID 23762
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"Technology shouldn't be a limiting factor in creating efficient, safe and sound derivatives markets"
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