As the end of 2023 nears, DerivSource shares some of the top reads from the previous year to give our readers a snapshot of some articles and podcasts the offer timely insight into ongoing industry trends, changes including financial regulation, collateral management, post-trade processing, risk and career development. Stay tuned for our Year in Preview editorial coming in the coming weeks.
Regulation
EMIR Refit is Coming: Don’t Underestimate the Scope of the Changes
EMIR Refit will come into effect in 2024 in both the EU and UK and like many rules rewrites there are significant changes for in-scope firms. Many reporting entities may underestimate just how fundamental many of these regulatory revisions will be to their processes and even their legal agreements. In a Q&A, Sam North, executive director, product management at the Depository Trust & Clearing Corporation’s (DTCC) and Andrew Pinnington-Mannan, head of regulatory practice at DTCC Consulting Services, discuss how trade reporting will change in Europe and how trade repositories can support firms through the transition.
APAC OTC Derivatives Reporting Rules – In Harmony But With A Few Twists
Lynn Strongin Dodds looks at how APAC’s main financial service hubs are grappling with the challenges in complying with the revisions to the OTC derivatives reporting rules.
Cybersecurity in Derivatives: Emerging Regulation
Cybersecurity is in the spotlight this year for the derivatives industry after recent cyber events that impacted the market participants. Lynn Strongin Dodds assesses the status quo of cybersecurity in the derivatives industry including emerging regulation (DORA, SEC, CFTC) and the potential implications for third-party providers and vendors.
Trading
ETDs: Old School Options Get A New Lease Of Life
Exchange traded derivatives have had a bumper year. This article looks behind the scenes at the main drivers behind the increasing volumes.
Clearing
Clearing the Air – the Both Sides of the Active Account Mandate
An exploration of the ongoing debate and discussions over the European Commission’s EMIR 3 clearing proposals.
The Error of Margin is Back on the Table
A look at the ongoing debate about margin procyclicality at CCPs and the renewed actions of regulators.
Full Speed Ahead: Pension Funds Take Final Steps Ahead of CCP Deadline
With just months to go until Europe’s pension funds must centrally clear over-the-counter (OTC) derivative transactions, concern and uncertainty continues to plague the industry.
Collateral Management and Securities Lending
Collateral Inventory Management & Mobility: A Step Back to Take Leaps Forward
Collateral management has come a long way in the last decade. Regulatory change impacting both cleared and uncleared derivatives has driven investment into this traditionally post-trade operational unit. Despite making big strides in reducing operational inefficiencies, many financial institutions lack visibility into their collateral inventory across venues and asset class silos. In a Q&A, Alistair Griffiths, director of EMEA sales at Baton Systems, explains why the collateral managers today should be focused on establishing transparency into their entire collateral inventory and how doing so can fuel significant improvements in collateral mobility and efficiency for the benefit of the entire business.
Updating Prime Brokerage Margin Models: The Need for Transparency and Real-Time Risk Management
Ongoing market uncertainty and interest rate hikes mean hedge funds are taking on less leverage and looking for alternative alpha generation strategies As lenders, prime brokers face increased market competition and risk from potential hedge fund defaults. In this DerivSource commentary article, Vardaan Kohli, product specialist at Cassini Systems, discusses the need for updated prime brokerage technology solutions to monitor real-time margin movements to efficiently manage risk while providing hedge fund clients transparency and peace of mind over margin calculation processes.
Collateral Optimisation: Navigating Market Turbulence in 2023
In this episode of the DerivSource podcast, Living the Trade Lifecycle, David White, CloudMargin’s chief commercial officer, we explore how collateral management operations, despite recent UMR-related investment, are still plagued by many challenges- some internal such as bifurcated processes, reliance on legacy technology and a lack of automation and now in recent months – external challenges due to market conditions. Tune in to hear more about how firms can take their collateral operations to the next level through upgrading their tech stack and utilising tools (e.g., collateral optimisation) to strategically and efficiently navigate turbulent market conditions brought on by rising inflation, interest rates and general volatility.
Market Structure and Post Trade
Derivatives Market Structure – Where is the Optimisation?
Waves of regulation in recent years have fundamentally changed the derivatives landscape and driven increased automation. In a Q&A, Stephen Bruel, head of Derivatives and FX, Market Structure & Technology at Coalition Greenwich, discusses the key findings of a recent report called “Derivative Market Structure 2023: Optimization is not at the Margins”. Read on for insight into the macro trends impacting derivatives market structure – regulation, margin and capital management – are behind efforts to maximize the economic value of derivatives trading desks.
Identifier Update: Current Uptake and Next Steps
The emergence and uptake of identifiers for financial instruments, products and transactions continues to develop in the financial industry. Born out of the need to support compliance with regulatory reporting requirements and boost transparency and efficiency in post-trade processing, these identifiers are still evolving. In this article, we offer an update on some of the key identifiers in the derivatives and financial space (OTC ISINs, UPIs, UTIs and DTIs) to shed light on current challenges in uptake, usage and what’s next for each identifier in the remainder of 2023 and beyond.
Risk
The Role of Curve Analytics in Navigating Market Volatility in 2023
High market volatility due to ongoing economic turbulence and market challenges related to inflation and interest rate hikes are set to continue in 2023. This confluence of market events creates challenges for curve trading analytics. In a Q&A, Didier Loiseau, global head of trading and financial engineering at Murex, sheds light on how technology (data and analytics) can help financial institutions better navigate these market challenges.
Career
Tech-Savvy Compliance Pros Have Abundant Career Opportunities
Joseph Schifano, Global Head of Regulatory Affairs at Eventus, recently appeared on the DerivSource podcast ‘Living the Trade Lifecycle’ – specifically its ‘Professional Pivots’ series – to discuss how advances in technology are impacting compliance professionals and how they can keep up. This Compliance in Focus article excerpts Schifano’s key points from the podcast, in his own words.
Collateral Management Professionals – How Honing Skills Paves the Way for Career Growth
As part of the DerivSource Professional Pivots podcast series, we speak to Chetan Joshi, Founder and COO of Margin Reform, about how the role of a collateral manager is changing, the current opportunities for career advancement and how upskilling through training and education can help professionals achieve successful career growth.
Risk and Compliance Professionals – Networks are Crucial to Career Success
In this episode of our Professional Pivots podcast series, we speak to Kimberley Cole, Chief Risky Officer at Risky Women, about how the careers in risk management and compliance are changing in today’s environment. We explore how the use of various tools such as industry networks, workshops and resources (Watch Lists) is integral to helping individuals amplify their visibility, increase industry knowledge and seek out opportunities to advance their careers.
