The Law of Unintended Consequences – example [insert large number here]

I have been following the Basel III regulations for some time. As always with regulation of this breadth & importance, there is lot to discuss but it seems there has been an immediate impact on funding for the “real” economy, i.e., project and trade finance. Continue reading

Compliance dates for clearing delayed again

Just in case you missed it.

Bill at and the Streetwise Professor reported on the further delay of rule creation/implementation.

From Bill’s blog re: EMIR “the target date for compliance with EMIR is not 1st January 2013. The new dates stated by David were: Clearing from 1H 2013, Reporting in 2H 2013, Trading (OTFs) in 2014″

From Yahoo via the Streetwise Professor, “Global regulators said on Wednesday they will issue proposals in coming weeks on rules to encourage banks to put derivative trades through a central clearing house, but they won’t be ready for the G20 summit in June.” The article also has some pithy things to say about clearing and centralisation of risk – definitely worth a read.

Ever wondered how much revenue JP Morgan makes by product line?

Well, wonder no more! Jes Staley presented a breakdown at their investor day earlier this week.

It’s pretty interesting reading but don’t assume that this is the full story. As pointed out by Bloomberg here “The bank’s description of high-volume products didn’t account for all of its trading revenue. JPMorgan reported an average of $3.8 billion from trading in fixed-income products, currencies and commodities, and $1.2 billion from equities over the last four quarters. The product revenue listed in the presentation totaled $2.3 billion in fixed-income and $675 million in equities.”

More comment here and here. Full presentation is here.

The Caplin Breakfast panel at Profit & Loss Forex Network Asia 2012

Yesterday I had the opportunity to sit on the Caplin sponsored breakfast discussion at the Profit & Loss event here in Singapore. Profit & Loss Asia

The panel, entitled “A Focus on Platforms: How they’re changing and why they’re changing – the Asia perspective and the global perspective” was a great success with over 90 people attending.

I’d like to thank my fellow panelists (Saptak Gangopadhyay from the Singapore Mercantile Exchange, Robin Poynder from Thomson-Reuters, Simon Winn from Commerzbank, and of course moderator David Clark, chair of the Wholesale Markets Brokers Association) for an interesting and unique dialogue.

Some of the key points of our discussion around platforms included:

• Why is Asia different? What does 2012 hold?”

• RMB trading – London is pitching to become the primary centre for trading the Renminbi outside China – will this happen? What are the implications for the other Asian currency markets?

Thanks to all those who attended & I trust you found the discussion interesting.

See you at the London conference! (details here)

Social media regulation in financial services

Following on from Duncan’s post on social media, I wondered how this new medium could or would be regulated when applied to the financial services space. I found 2 articles on this subject but would welcome any comments whether there is anything more recent.

FINRA on Social Media

The first article describes how FINRA has decided that social media will not be regulated – mainly because the existing rules have a post-use filing requirement which they deem to be too demanding. In their words:

If every member firm is required to monitor and review all of the online postings of all of its registered representatives, and every member firm is required to file those that trigger a filing requirement, the impact upon FINRA is potentially overwhelming. Continue reading

Clearing Models in a SEF world

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: Continue reading

Dodd-Frank in One Graph…..

Saw this last night – it isn’t often that you can reduce 849 pages of legislation to a one page graph but Karen Weise has a decent shot at it. The graph is here.

Is Considering UX Design Revolutionary?

I have been involved in a number of projects with our UX team recently & have been pleasantly surprised at the insights that they produce.

In one case the bank had already built a substantial list of requirements. We began our engagement, as we always do, with UX research – and the team not only indentified a bunch of end-user requirements that were about the way *they* preferred the interaction but also recommended several unique pieces of functionality which the end-users would really value – likely to make the resulting single-dealer platform (1) unique for the bank, (2) more useful and therefore (3) more likely to retain the bank’s customers.

Not only that, but by building a design for the user interaction before starting to write code, the whole development process was massively accelerated.

Only a handful of years ago few people had heard of user experience design, today it’s become the essential first step in building a new web trading application. Putting the users’ needs first – now that IS a revolution.