OTC Products

CCP Feature Comparison Matrix | SIFMA AMF

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. 

OTFs are Go | But is a SEF = an OTF?

According to reports from inside Europe, the concept and reality of an Organised Trading Facility (OTF) will become a reality under MiFID 2 in the medium term future. The implication is that OTC products will have an electronic equivalent to the US SEF, whether trading will be mandated, and to what extent is unclear as yet.

Vote: Plans to replicate CCP IM Calculations

In the Exchange Traded Market, firms often use software like GMI or Rolfe & Nolan to replicate and reconcile the amount of IM a CCP calls for. In the OTC market this means having your own tools to run a Historic VaR, or similar IM model. My own opinion is that sooner or later users of CCPs for OTC products are going to want the ability to be sure the IM call is "correct", rather than blindly accept the CCP figures, as the amounts of IM are going to be very large, relative to ETD products. Please vote below, and I will reveal a summary of the results in a week or so.

ISDA Analysis of Year End Market Survey 2011

Analysis of the new SwapClear - the membership gates are wide open

The membership framework at SwapClear has been in place in the early 2000s, linking the entry criteria to the default management procedure tightly. The announcement yesterday of a heavily revised framework opens the door to many more direct members, provided they can live with the new approach to default.

Happy trainees

Last week I successfully delivered a three day course on central clearing to 11 individuals, with modules on Legal and Risk provided by Anna Iversen & Adam Ward at Amunet Partners, and Ed Selby at Lothbury Associates, respectively.

Dodd Frank & EMIR time line update

The effects of new regulation from the US and Europe are drawing closer, whilst rule making is still not complete, and unpredictable, the regulators deadlines are becoming more clear.

UPDATE Nov 2nd: This post has been superseded by this one: http://theotcspace.com/2012/05/30/emir-compliance-dates-moved/

For dutch viewers: Emir Status En Tijdlijnen

OTC Derivatives at LCH show 108% fee growth

The LCH annual report for 2011 (PDF here) shows that the majority of the revenue increase in revenue was from OTC products (SwapClear), a jump from €21.2m to €44.2m. This is explained by two factors, an increase in membership fee levels, and the growth in membership overall.


The following comment indicates a new growth path:

Reuters Hysteria: CCPs to be next victim of the crisis

Reuters has posted an attention grabbing headline, but the article needs more research and depth to carry it's argument. The original piece is here, the salient facts from the article are:

ISDA to the G20: "Standardize This"

ISDA have highlighted the sentence in the G20 commitments that makes less sense than some, namely “All standardized OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest.”