Tag: OTC derivatives

OTC derivatives

DSB Survey Finds Demand for Analytics Functionality

The Derivatives Service Bureau (DSB), founded by the Association of National Numbering Agencies (ANNA) to facilitate the allocation and maintenance of International Securities Identification Numbers (ISINs), Classification of Financial Instrument codes (CFIs) and Financial Instrument Short Names (FISNs), for OTC derivatives, has announced the results of its second 2019 industry consultation. The survey reveals “a […]

NEX Regulatory Reporting Launches Australian Solution

NEX Regulatory Reporting has launched a new solution for derivatives transaction and position reporting under the Australian Securities and Investments Commission’s (ASIC) OTC derivatives trade reporting requirements.The ASIC solution expands the firm’s global reporting coverage and provides Australian firms and international companies trading in Australia, with a full end-to-end transaction reporting solution to both licensed trade repositories.
ASIC introduced OTC derivatives trade reporting in 2013 to improve risk management and enhance transparency in the OTC derivatives market – it was phased-in between 2013-2015.

FCA Paper Claims to Throw New Light on Sterling Flash Crash

A new paper published by the UK’s Financial Conduct Authority (FCA) claims to throw new light on events surrounding the sterling flash crash of October 2016 by being the first paper to use trade reports to the FCA under EMIR to analyse how different market participants react in times of market stress and their impact on the liquidity dry-up in a flash crash.
The paper has, however, triggered some confusion amongst market participants thanks to ambiguous terminology, mainly the constant reference to “OTC derivatives”, without specifying exactly what products it is talking about.

Derivatives’ Positions Outstanding Decrease: BIS

The increase in OTC derivatives positions that took place in the first half of 2016 reversed in the second half according to the latest data from the Bank for International Settlements (BIS).
The notional amount of outstanding OTC derivatives declined from $553 trillion to $483 trillion between end-June and end-December 2016, and their gross market value – the cost of replacing all outstanding contracts at current market prices – fell from $21 trillion to $15 trillion over the same period.

TriOptima Responds to Rules with New Analytics Service

TriOptima has added margin valuation adjustment (MVA) analytics to its triCalculate X-Value Adjustment (XVA) service.

MVA calculations determine the lifetime costs of posting initial margin as part of the pricing of an OTC derivative.

TriOptima says that the introduction of an MVA service addresses the needs of firms subject to new initial margin rules for OTC derivatives, which affect both cleared and non-cleared trades.

Pricing trades correctly is critical to ensuring accurate credit risk, counterparty exposure and funding management. While the posting of initial margin has always been a part of the central clearing process, the new rules mandating the posting of initial margin for non-cleared OTC derivative trades are being phased in from this year through 2020 and will affect a wide range of market participants.

Firms will be able to use triCalculate in order to generate independent trade and netting, set level XVA calculations, as well as risk sensitivities. They can access the platform to check the MVA implications of a trade before execution without delaying trading activity.

BIS Data Highlight Impact of Clearing on Interest Rate Market

The Bank for International Settlements (BIS) has released its latest semi-annual survey of OTC derivative markets which highlights the growing impact of central clearing on interest rate derivative markets.
The publication presents the combined results of two complementary BIS surveys on positions in OTC derivatives markets: the semi-annual survey of derivatives dealers in 13 jurisdictions, and the Triennial Central Bank Survey of dealers in an additional 33 jurisdictions. The surveys took place at end-June 2016. A companion survey on turnover in foreign exchange and OTC interest rate derivatives markets took place in April 2016, and the results were published in September.

Thomson Reuters, Clifford Chance, Team Up on Documentation

Thomson Reuters and Clifford Chance have joined forces to help financial institutions tackle in what they term a timely, efficient and more cost-effective manner, their most pressing regulatory obligations relating to margin rules for uncleared OTC derivatives.
The firms claim they are using an “innovative approach to contract negotiation and documentation” and that the partnership offers a “flexible, rapidly scalable, technology-enabled solution that will empower these financial institutions to meet their current multi-jurisdictional regulatory obligations and as they continue to evolve in the future”.