Woodbine Associates, Inc.
  Capital Markets Consulting and Research

 

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OTC Derivatives Readiness Guide
Business and Regulatory Requirements for Asset Managers and Other End Users Under Title VII

Report Details Key Business and Regulatory Requirements for End Users to Succeed in the Rapidly Evolving Derivative Markets
  

Stamford, Connecticut, January 28, 2013 - Woodbine Associates, the capital markets consulting firm (http://www.woodbineassociates.com), announces the release of its latest report, “OTC Derivatives Readiness Guide: Business and Regulatory Requirements for Asset Managers and Other End Users Under Title VII,” which comprehensively examines the business and regulatory requirements for asset managers, hedge funds, and other end users in the newly regulated OTC derivative markets. The report details the key business, operational and technology requirements firms face and provides a clear, concise framework to assess Title VII readiness.

The report is a “soup-to-nuts” guide and checklist for buy-side firms to use in assessing their readiness to transact under Title VII. It examines key issues confronting senior trading and operations personnel. The report provides a road map for end users to establish relationships and prepare operational infrastructure to function optimally within the new framework. 

“Buy-side firms and derivative end users need to move full speed ahead to ensure they can trade swaps effectively in the new market structure,” says Sean Owens, the report’s author. “The derivative markets are in the process of undergoing a substantial transformation. Firms must meet both baseline regulatory requirements and a broader set of business needs for optimal performance. Management must ensure they have the capabilities and flexibility to meet the challenges of the evolving environment. Immediate action is essential.”

The report focuses on end user requirements in seven key areas:
  • Centrally Cleared Swaps
  • Bilateral Non-cleared Swaps
  • Execution
  • Pre-trade Analysis and Product Selection
  • Collateral Management and Post Trade Processing
  • Reporting and Recordkeeping
  • Specific Entity Requirements
Within each of these sections, the report analyzes key business, documentation, compliance and technology issues.  All are critical to meeting the new regulatory requirements and establishing business practices that will be necessary moving forward.

Key Points:
  • Firms will need enhanced capabilities to process, finance and allocate collateral to minimize the costs associated with restrictive CCP and counter party margin requirements
  • CCP and FCM selection will substantially impact firms’ future capabilities and flexibility
  • Middleware will play an essential role in connectivity, affirmation and confirmation.
  • OMS systems and SEF aggregation platforms will play key roles that include consolidating risk measurement, venue connectivity and displayed liquidity.
  • Pre-trade analysis of product, margin and venue, and post-trade collateral management, will significantly impact the economics of transactions and the products used to transfer risk
  • Internal compliance, position monitoring and risk management responsibilities will significantly increase for end users

This report provides strategic as well as tactical insights to firms active in trading and managing collateral for OTC and listed derivatives and other products and securities. 

Sean Owens, the author of this report, has more than a decade of OTC derivatives trading experience.

The 50 page report contains 2 figures and 16 tables

For more information or to purchase, please contact:

Sean Owens
Director of Fixed Income
Phone:  203-274-8970 ext 204
Email: sowens@woodbineassociates.com 


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