OTC Derivatives Processing special report
Click here to download the PDF
This Challenge Is Not Trivial
The rise in popularity of exchange-traded and over-the-counter (OTC) derivatives from a buy-side perspective is not a new phenomenon, but it is a growing one. Asset managers are yielding in ever greater numbers to the market's push and pull factors-the push away from traditional asset classes such as equities due to ever-shrinking margins, and the pull from the derivatives market, offering participants greater potential for alpha, although this market is not without its risks-making this one of the fastest-growing business segments in the financial services industry.
But the derivatives market, especially when it comes to OTC instruments, does present its fair share of challenges, chief among which are the dual-pronged issues of technology and operations that need to be satisfactorily addressed before firms can claim to have the wherewithal to systematically and efficiently manage such variables as counterparty credit risk, margin calls, collateral, the affirmation and confirmation processes, and clearing and settlement.
But let's be clear here: Developing an internal and external infrastructure connecting all the necessary links in the front-to-back-office chain is anything but a trivial exercise.
In this special report, covering just about every aspect of exchange-traded and OTC derivatives trading and processing-from haircuts to holistic risk views and SEFs to straight-through processing-our six sources discuss the crucial role that technology plays in supporting this complex industry, the need for market participants to finally get moving in terms of adopting standards to help the automation of such business processes, and the fact that much of this back-office game is in its infancy, and is therefore yet to be played out.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
Symphony boosts Cloud9 voice offerings with AI
The messaging and collaboration platform builds on Cloud9’s capabilities as it embraces the AI wave in what CEO Brad Levy calls “incremental” steps.
Can exchanges leverage new tech to claw back ETF share from RFQ platforms?
Systematic trading strategies and proliferating data are bringing efficiency to an otherwise-fragmented European ETF market.
Nasdaq reshuffles tech divisions post-Adenza
Adenza is now fully integrated into the exchange operator’s ecosystem, bringing opportunities for new business and a fresh perspective on how fintech fits into its strategy.
Liquidnet sees electronic future for gray bond trading
TP Icap’s gray market bond trading unit has more than doubled transactions in the first quarter of 2024.
This Week: HKEx's new derivatives platform; GoldenSource; Quonian-SimCorp, and more
A summary of some of the latest financial technology news.
Chris Edmonds takes the reins at ICE Fixed Income and Data Services
Edmonds is now leading ICE’s fixed income and data business as the rush to provide better data and analytics in fixed income builds.
Systematic tools gain favor in fixed income
Automation is enabling systematic strategies in fixed income that were previously reserved for equities trading. The tech gap between the two may be closing, but differences remain.
Waters Wrap: Examining the changing EMS landscape
After LSEG’s decision to sunset Redi, Anthony examines what might lie ahead for the EMS space.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- Deutsche Börse democratizes data with Marketplace offering
- Waters Wavelength Podcast: Broadridge’s Joseph Lo on GPTs