Derivatives

A Progress Report on OTC Derivatives Trade Repositories

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This white paper assesses progress against G20 goals and proposes recommendations to further improve the global reporting framework for the OTC derivatives market. It highlights that substantial work remains in the areas of data consistency, aggregation and access in order to be able to effectively monitor and reduce systemic risk and advocates the exploration of opportunities to leverage new and emerging technologies.

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OTC ISINs: Few Users Pay Much More

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Trading venues, banks, and broker-dealers now know for certain how much more they will have to pay to create International Securities Identification Numbers (ISINs) for over-the-counter derivatives. It turns out that it’s a lot more. In a recent statement, the Derivatives Service Bureau (DSB) said that instead of paying €65,000 for the first fifteen months […]

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New Year’s Message: Pay More for OTC ISINs?

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Data, operations and vendor procurement managers whose buy- and sell-side firms need international securities identification codes (ISINs) for over-the-counter derivative contracts could end up with some bad news come January 15. Financial firms might discover they will be paying additional fees to the Association of National Numbering Agencies’ Derivatives Service Bureau (DSB). The reason: they […]

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CDM and the path to Christmas 2027

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by Alan McIntyre, Industry Relations Lead

Keeping the theme seasonal and giving a slight nod to our previous article (The CFTC Roadmap and Christmas 2019), earlier this month we were afforded a glimpse of the ghost of a future Christmas. That glimpse came courtesy of ISDA with their excellent conference in London on Technology and Standards: Unlocking Value in Derivatives.

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What is going on in Uncleared Derivative Markets?

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We look at data from the BIS on Uncleared IRS. Notional Outstanding of Uncleared derivatives has been constant for the past year. The Gross Market Value of these derivatives has decreased by around 40%. The reduction in market value seems to be related to rates moving higher. Both Cleared and Uncleared markets have seen large […]

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MiFID Challenge: Which OTC Derivatives to Report?

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To report or not to report over-the-counter derivatives under MiFID II. That is the question that compliance and regulatory reporting managers will face when it comes to deciding which trades to include in their transaction reports the day after trades are executed. The wrong answer could cost them hefty fines but finding the right answer will […]

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Blankfein in Frankfurt and the threat to LCH

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Since 2008, the growth of central counterparties has been one of the most profound changes in the over-the-counter derivative market, and particularly striking is the performance of the London Clearing House.

From clearing just 28% of OTC interest rate derivatives in 2008, the LCH’s Swapclear service now clears over 70%, with $311 trillion of notional outstanding at the end of October. Compare that with the $416 trillion of total swap notional reported by the Bank for International Settlements.

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Form N-PORT: Managers Report Big Stress

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Middle-office operations managers, compliance managers, and technologists preparing for the US Securities and Exchange Commission’s new reporting rules for registered funds are still having trouble figuring out to complete the new more detailed Form N-PORT. Annoyance, anxiety and outright anger are some of what they are feeling, they tell FinOps Report. Their antidote: keep plugging […]

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Unique Product IDs: Can the OTC-ISIN Win the Job?

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Can International Securities Identification Numbers (ISINs) become the foundation for unique product identifiers (UPIs)? The new Derivatives Service Bureau (DSB) which will allocate ISINs for over-the-counter  derivatives, appears to think so. It also thinks that it might be the organization issuing the UPIs, although it is willing to work with others. If such a scenario […]

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Morgan Stanley Fine: Lessons in Fee Recon Failures

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Futures commision merchants had better pay far closer attention to their middle office fee reconciliation process, caution operations experts. Morgan Stanley’s recent US$500,000 fine from the Commodity Futures Trading Commission (CFTC) for overbilling clients trading fees isn’t a large fine considering the FCM’s size. What is alarming is that Morgan Stanley is the fourth FCM […]

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