The OTC Space | Category Archive

Bank of England | Financial Stability Paper No 20: Central counterparty loss-allocation rules

April 29, 2013 by Bill Hodgson 3 Comments

A paper explaining how CCPs allocate losses to members in a default. Financial Stability Report | Financial Stability Paper No 20: Central counterparty loss-allocation rules.

Do clearing mandates actually work?

April 26, 2013 by Jon Skinner 3 Comments

In an environment where bilateral and cleared trades are more appropriately risk mitigated through bilateral margin, CCP margin and guarantee funds and Basel III capital, fragmentation costs and increases in systemic risk due to regulatory clearing mandates may actually outweigh systemic risk and funding and capital benefits. Why? Because mandatory clearing has fragmentation costs […]

Swapfutures vs. swaps – buy-side views

April 15, 2013 by Jon Skinner 1 Comment

Some comments from buy side firms and SEFs on the CFTC’s and CCP’s differential treatment of economically equivalent swaps and swapfutures are contained here (Risk mag, subs). The gist is that margin advantage alone won’t make a sudden large scale shift from OTC swaps to swapfutures happen overnight but will play out over a longer period […]

Basel III, sefs

Insight Investment Pioneers its own Client Clearing Agreement | Derivsource

April 3, 2013 by Bill Hodgson 2 Comments

Insight have built their own legal framework to give their customers the best possible service once in clearing, read about it over at Derivsource.com. Insight Investment Pioneers its own Client Clearing Agreement | Derivsource. (Free registration required)

Optimizing the Cost of Customization for OTC Derivatives End Users

March 28, 2013 by Jon Skinner 0 Comments

Optimizing the Cost of Customization for OTC Derivatives End Users For those of you who haven’t seen it I recommend the article with the above title in the paper at the attached link (starts on page 69) published by the Institute for Financial Markets and written by Sean Owens from Woodbine Associates (a research-based consulting […]

Basel III, bilateral, cftc, cleared, Initial Margin, o malia, otc, otc derivatives

Decision support in a cleared world – FTSE Global Markets

March 27, 2013 by Bill Hodgson 0 Comments

My latest piece for FTSE GM magazine – should you be thinking about how you route trades via your FCMs and CCPs using IM, Fees and Regulatory Capital as criteria? Decision support in a cleared world – FTSE Global Markets.

Euroclear Collateral Conference | Materials

March 26, 2013 by Bill Hodgson 0 Comments

Euroclear have published on-line the entire suite of materials from the recent conference in Paris covering a wide range of topics including their new Highway and related services. Kurt Jarnigan from RBS gave a talk on Enterprise Collateral Optimisation, and John Burke on a new ECB Eligible Baskets CCP being launched from within Clearnet, plus […]

Conference, Paris

Do current client clearing volumes indicate the outcome of the IRS CCP race?

March 25, 2013 by Jon Skinner 1 Comment

On client clearing notional outstanding, Swapclear has so far outcleared CME in IRS so far by a factor of more than 4 fold ($4.62 trn vs. $1.01 trn as of March 13th). Note: CME client clearing will be less than $1.01trn to the extent of their dealer to dealer clearing volumes. Where are the figures published? On […]

CCP competition, client choices, Client Clearing, legal regime, operational convenience, optimization tools

Mandatory clearing, is it really happening? | Clarus Financial Technology

March 13, 2013 by Bill Hodgson 3 Comments

Someone send this to Gary Gensler, it’s less exciting than watching paint dry. Mandatory clearing, is it really happening? | Clarus Financial Technology.

CFTC, Client Clearing, Dodd Frank