Posted on December 5, 2013 by Paul Blank
Just finished listing to an interesting webcast on Global OTC market reforms, and where next after the US and SEFs?
Celent analyst Anshuman Jaswal, gave overview of market, SEF volumes to date, and possible differences in regulatory treatment and approach in Europe and Asia.
Some key points form slide deck and a couple of slides below.
SEF and OTFs are critical components in evolution of the market from OTC non-standardised bilaterally cleared to standardised electronically traded and centrally cleared swaps.
Celent slide on shift to standardised swaps
In terms of SEF volumes (more…)
Filed under: CCP, CFTC, Dodd Frank, OTC, OTF, Paul Blank, SWAPS, Web trading technology | 1 Comment »
Posted on June 20, 2012 by Paul Blank
GreySpark has just released the results of their Annual e-Commerce Report: ” Trends in e-Commerce and Electronic Trading 2012″.
GreySpark outlines that propositions must now evolve, or sellside franchises will decline. The new regulations have a significant impact on the growth of e-commerce and electronic trading. (more…)
Filed under: CCP, Dodd Frank, MiFid, OTC, OTF, Paul Blank, Single-Dealer Platforms | Leave a Comment »
Posted on June 6, 2012 by Paul Blank
Risk.Net has an interesting article today (extract below), quoting MEP Kay Swinburne, talking about modifying Mifid to accommodate systematic internaliser (SI), which has implications for Single Dealer Platforms.
“We think we can make the systematic internaliser (SI) category work for single-dealer platforms,” she says.
“We thought this was the better way – rather than amend the multilateral element of OTFs, we will try to adapt the SIs.”
SIs allow trades to be executed against the owner’s proprietary capital, and are not required to involve multiple market-makers – but they are not recognised by Mifid as a platform on which standardised OTC derivatives can be executed. Swinburne hopes to change that.
Full article here, (or use this link for google reach, and select first article) and our previous comments on this topic here
Filed under: Dodd Frank, MiFid, OTF, Paul Blank, Single-Dealer Platforms, Web trading technology | Leave a Comment »
Posted on May 22, 2012 by Paul Blank
The CME has released their new offering, CME Direct. Delivered via the web, it combines OTC (broker-liquidity) with CME futures liquidity.
Fully integrated with CME ClearPort, enabling OTC (voice) trades to be submitted for clearing instantly without manual intervention by client, or broker, reducing time and errors. CME Direct is launching initially with CME Group benchmark energy futures and global OTC oil markets, with more to follow.
Michel Everaert, MD CME interview:
Link to CMEDirect webcast
Coverage: CME Direct, PR release and Bloomberg
Filed under: CCP, Dodd Frank, OTF, Paul Blank, SWAPS | Leave a Comment »
Posted on May 7, 2012 by Paul Blank
A recent Caplin white paper, Single-Dealer Platforms in a Cleared World, and here we examined how SDPs were evolving to meet the new regulatory requirements for OTC markets.
The conclusion of the paper, being that SDPs would continue to thrive, providing clients with access to liquidity, both on a bi-lateral basis, as well as providing some form of SEF/OTF liquidity aggregation, and smart order routing through to mandated execution venues, as required for cleared products.
In recent weeks, some concerns have been raised (misplaced in my opinion) that (more…)
Filed under: Dodd Frank, MiFid, OTC, OTF, Paul Blank, SEF, Single-Dealer Platforms, Web trading technology | 1 Comment »
Posted on April 19, 2012 by Paul Blank
Are the EU and US regulators converging, or diverging? Are definitions of SEFs (under Dodd-Frank) and OTFs (under MiFID) equivalent? And, do regulators get the differences between multilateral and bilateral execution?
Filed under: CCP, CFTC, Dodd Frank, Internalisation, OTC, OTF, Paul Blank, Regulation, SEF, SWAPS | 2 Comments »
Posted on March 1, 2012 by Mike Hill
Paul Blank and I spent yesterday afternoon in the comfortable surroundings of the BT Centre auditorium in Newgate Street at the inaugural meeting of the Clearing and Settlement Working Group (CAS-WG).
Conceived by Chris Skinner of the Financial Services Club, Chris Pickles of BT and the directors of the Realization Group, this is an attempt to start something similar to the successful MiFID joint working group but for clearing and settlement. We went along, not because we thought we had anything to contribute, but believing we could learn something about what happens after someone clicks a “buy” or “sell” button on one of our clients’ single-dealer platforms.
UPDATE: A detailed write-up of the meeting, with photographs, is now available on the Financial Services Club blog.
Dealing with the regulatory fire-hose (more…)
Filed under: Dodd Frank, Mike Hill, OTC, OTF, Regulation, Web trading technology | Tagged: CAS-WG, Dodd Frank, OTC, regulation, SEFs | 1 Comment »
Posted on February 8, 2012 by Paul Blank
Today’s AFME, European Market Liquidity Conference was very well attended, with a great program – each item could have done with its own full day session. Below are quick notes I jotted down during some of the sessions, although clearly I don’t do justice to the quality of debate at the conference.
There was a good mix of attendees, participants and panellists, across the spectrum covering buy & sell side firms, central bankers, regulators, clearers, policy makers and vendors. Views expressed were personal ones (ie no policy statements from the ECB – although Francesco Papadia wasn’t shy in promoting his book!).
So, what themes emerged:
Filed under: CCP, CFTC, Dodd Frank, MiFid, OTF, Paul Blank, Regulation, Web trading technology | Tagged: AFME | 1 Comment »
Posted on January 29, 2012 by Scott McLeod
Kevin McPartland of the Tabb Group hosted a Fixed Income event last Tuesday in New York. According to our sources, the event was hugely oversubscribed – not surprising given Tabb Group & Kevin’s focus and insight on Dodd-Frank and itss intended and unintended consequences.
According to Wall St & Technology, one of the areas of discussion was understanding how clearing will function so that execution risk is mitigated. In short, if a trade is done through a SEF, that trade is not complete until the clearer has accepted it. Which means that the counterparties (or their clearing agent/FCM) are still at risk until the acceptance has happened. Hence the focus on how that risk can be mitigated.
The proposals fall into two groups: (more…)
Filed under: CCP, CFTC, Dodd Frank, Latency, OTC, OTF, Regulation, Scott McLeod, SEF, Single-Dealer Platforms, STP | 4 Comments »
Posted on December 1, 2011 by Paul Blank
Celent hosted an interesting WebEx yesterday on Dodd-Frank and EMIR Regulation, Derivatives Reforms and IT Impact.
They presented a risk analysis based on three potential scenarios that could develop, depending on how the final SEF and OTF rules fall out.
Amongst the key characteristics of the market structure they see developing include:
- Two tier model for SEFs with separation between an interdealer and dealer-to-client SEFs
- Single Dealer Platforms qualifying as OTFs/SEFs (due to loose definitions)
I certainly agree that SDPs can qualifying as OTFs, although according to an item in today’s FT, German and French regulators are questioning the need for OTFs .
However, I can’t see how Celent could imagine (under any scenario) that SDPs could also qualify as SEFs, as the 25% ownership limitation for SEFs would by definition preclude bank SDPs from becoming SEFs. Our view is that SDPs will become a major channel through which clients access SEF liquidity, through the use of SEF aggregation.
Below is one of the more interesting slides, which looks at possible market structures. Celent’s view is that scenario 2 is the most likely outcome.
Celent state that:
In a new report, Swap Execution Facilities and Organised Trading Facilities: A New Market Structure Emerges, Celent offers key insights into the likely future direction of SEF/OTF markets and critical factors setting this direction. Based on these insights, Celent believes that there are multiple scenarios for the market structure to reach the SEF/OTF future state. However, because of fragile liquidity, industry feedback, and cautious regulators, a dominant scenario emerges as the most likely outcome.
Celent report here
Filed under: Dodd Frank, MiFid, OTC, OTF, Regulation, SEF, Single-Dealer Platforms, Web trading technology | 2 Comments »