I am quite swamped these days trying to gather all sorts of data on CCPs and their offerings and to my surprise I came across this pretty useful matrix in XLS format, a comparison analysis actually, on this page on the SIFMA site under the heading "Central Clearing Counterparty (CCP) Matrix" . It is supposed to be a tool for asset managers but I would say it can prove very helpful to all Buy - Siders.
On 1 September, ESMA issued its advice to the Commission on declaring countries outside the EU to be equivalent under EMIR. The good news is that at long last we should have some certainty on what approach to expect. The bad news: we are in for years of frustration as practitioners attempt to nit-pick their way through the new cross-border requirements.
Finadium has published a new report in which it presents the results of a new survey of large end-users in the OTC derivatives clearing and collateral market. The report is based on in-person and telephone interviews with large OTC derivatives end-users conducted by Finadium in May 2013. Data were gathered from 16 firms including mutual funds, insurance companies and second tier banks and brokers that had elected to outsource OTC clearing.
Of all the firms that will be required to clear over-the-counter derivatives, pension funds are the group for which it looks most problematic – hence a three-year exemption in Europe’s clearing legislation. But that grace period started last August, and there are a lot of issues to resolve by the time it expires in 2015. In the meantime, relatively few funds are deciding to start clearing voluntarily – and that’s the right call, says Vanaja Indra, market and regulatory reform director in the financial solutions group at UK-based pension fund specialist Insight Investment.
A great piece by Nick Fry on DerivSource regrading the changes that Industry will go through in its efforts to comply with regulation requirements. Using figures from the recent ISDA Operations Benchmarking Survey (OBS) in May 2012, he makes his point that the market will have to change dramatically in order to comply.
Things are moving fast in US and the first FCM has completed its production testing with CreditLink. One of the fundamental points of CFTC regulation 1.7 provides that clearing firms and buy-side firms should be able to ensure certainty of clearing acceptance by their clearing member at the time of execution and this service offers them the ability to manage trading and clearing limits in low latency for interest rate, credit and foreign exchange (FX) swaps.
A really good update by Herbert Smith Freehills LLP over at Lexology about EMIR and three areas of change that will mostly affect Non Financial counterparties and the way they use derivatives. Analysis is provided on clearing obligation , along with the thresholds and the hedging exemption, risk mitigation for non cleared trades and the reporting obligation.
A common theme emerged on the first day at the Global Derivatives Trading and Risk Management Conference. CVA, DVA and FVA (but also a number of other components) have found their way into pricing and valuation models of financial institutions after the financial crisis of 2008.