Industry warns of continued risk within derivatives clearing
Several industry figures have warned that action needs to be
taken in order to solve the risks that exist within derivatives
clearing. The caution comes in the wake of several high-profile
losses incurred by Société Générale
and MF Global, with accusations from many within the market
that both could have done more to protect themselves.
James Morely, executive director, European head of listed
derivatives operations at Morgan Stanley, said at GL
Trades Clearing Panel that the derivatives market must
strive for greater implementation of straight through
processing. In particular he said one area where greater
automation could be implemented was in the give-up space.
I would like to see a greater use of auto accept and
cart-blanche. This allows for positions to be transferred
quickly, risk to be move quickly. As an execution broker, I
dont want to be sitting on the trades for a second longer
than I have to, while as a clearing broker, I want to make sure
my clients get their positions in their account at the end of
the day but I dont want to manually check them all,
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