The past two years has seen several futures commission merchants or FCMs withdraw from the clearing space due to tighter regulation and higher costs. Non FCMs are taking up the slack but questions remain over whether they can fill the gap and if the trend undermines the development of the OTC derivatives market. In this DerivSource podcast we speak to Gerry Turner, executive director of Object Trading who discusses the changing FCM model, the new players and evolving OTC derivatives market.
In this audio interview Gerry Turner explores:
- Over the past two years, several banks have closed their OTC clearing units over the past 18 months. What have been the drivers?
- How is the business model changing and what type of services do FCMs need to provide to remain competitive?
- Does the current environment spell the end of the universal model and the rise of the local, specialised FCMs?
- What impact does the retreat of the FCMs have on the business? Could it seriously undermine the evolution of OTC clearing?
- What type of non-bank FCMs do you see filling the gaps left by FCMs?
- What are the challenges they face?
Listen to this audio podcast or read the transcript below.
