Regulatory reform in the OTC derivatives market will force changes in the way firms manage their collateral exposures, leaving participants concerned about the increasing complexity of the market.
demand for exotic and standardised derivatives has shown
encouraging signs of recovery since the decline experienced in
the immediate aftermath of the global credit crisis. This,
coupled with the major regulatory reforms underway in the OTC
derivatives market, has prompted firms to review their
collateral management processes.
move to central clearing for the majority of standardised,
liquid OTC derivatives instruments has become one of the most
fervently debated issues in the post trade space. It is
anticipated that a significant percentage of OTC derivatives
instruments will become centrally cleared. The remaining OTC
derivatives instruments will continue to be bilaterally cleared
and will be subject to timely confirmation, robust and
resilient auditable processes with frequent reconciliation and
effective dispute management, in addition to being subject to
appropriate capital requirement levels.
This article is available to subscribers and registered users
Please log in to continue reading.
Not yet registered? Take a free trial.
If you have already taken a free trial you
have ongoing access to the analysis section of FOW.com including this story.
Log in using your details below to read.
Already have an account? |