The latest semi-annual survey of OTC derivatives markets by the Bank for International Settlements (BIS) offers another insight into the impact of regulation on market activity. The survey finds that notional amounts of OTC derivatives activity at end-December 2019 was 2.7% higher year-on-year at $559 trillion, however seasonal factors meant that it was down from […]
Tag: OTC derivatives
The Financial Stability Board (FSB) today published its peer review of Mexico, which examined the implementation of the G20 commitments on over-the-counter (OTC) derivatives. Mexico’s OTC derivatives market is relatively small from a global perspective, but is the largest in Latin America. The market has a substantial cross-border component, with foreign banks being important players, the […]
FX settlement risk has increased since 2013 according to the Bank for International Settlements (BIS), both in relative and absolute terms, however the gross market value of outstanding FX and OTC derivatives has fallen, thanks largely to the growth in clearing. An article in the bank’s latest Quarterly Review says that in spite of “significant […]
The board of directors of the US National Futures Association (NFA) has approved the appointment of Michael Otten as vice president, OTC Derivatives. “We are thrilled to welcome Mike to this senior position overseeing NFA’s OTC derivatives department,” says NFA’s CEO and president Thomas Sexton. “With his significant regulatory experience and extensive background, Mike will […]
The latest Bank for International Settlements’ (BIS) latest semi-annual release of OTC derivatives statistics shows that notional volumes rose to $640 trillion at the end of June 2019, the highest level since 2014 and up from $544 trillion at the end of 2018. The BIS says part of the increase reflects a seasonal pattern evident […]
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 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.
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.
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 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.