Everyone you talk to in the market today
raises the same concerns: rising costs and increased regulation
are increasing barriers across the derivatives industry.
Everywhere you look, the barriers are
rising: rising costs means fewer new entrants into the market,
increased monopoly of infrastructure provision is raising the
barrier to competition and new rules on capital are increasing
the barriers for some firms to service clients.
The derivatives industry is in a new
The post-crisis era is defined by a
long-term low rate environment, increased fragmentation of
liquidity and greater regulatory oversight.
But the business models that have emerged
in the new era for market participants and infrastructure
providers are not creating a sustainable future for the
If costs continue to rise and the number
of players in the market continues to fall, the market will
dwindle to nothing.
There is a need for radical reform of the
market. But to be sustainable, this reform must not come from
regulators but from the market itself.
New models for co-operation need to be
built, re-mutualisation and democratisation must take centre
stage as a new era is built on firmer foundations than the
FOW, in partnership with Object Trading,
today publishes a new whitepaper exploring how the barriers to
entry have risen since the financial crisis and asks what can
be done to bring them down.
To download your free copy, click