Oversight Pointers: Fund managers will soon have practical guidance for best practices in overseeing outsourced operations contracts with custodian bank, fund administrators and other post-trade service providers. The ISITC, trade group representing operations specialists from over 100 buy and sell-side firms, is publishing a white paper with its recommendations in the fall. The guidelines, ISITC officials […]
SunGard’s New Derivatives Processing Utility: Panacea or Pipedream?
SunGard’s outsourced business model for handling post-trade functions in the listed derivatives and swaps market might sound like a dream come true for futures commission merchants and given that it has already nabbed its first mega client it’s off to a great start. But whether the initiative will gain widespread industry buy-in remains to be […]
Pre-Trade Swaps Credit Check: It’s Time to Study the Options
Once there were two pre-trade credit checking hubs for swaps. Now there is only one left standing. Time for fund managers to ask their clearing agents some tough questions. Futures commission merchants (FCMs) are backing Traiana’s pre-trade credit checking hub over Markit’s, which was forced to shut down for lack of traffic. Concerns about the potential for […]
Futures Commission Merchant: Four Steps to the Right Choice
It’s the phone call no operations manager wants to get. The trading desk just tried to execute a swap contract, and discovered that the newly hired futures commission merchant (FCM) doesn’t handle transactions in that currency. Or doesn’t accept that kind of collateral. Or isn’t a member of the necessary clearinghouse. Who’s to blame? Good question, […]
Growing Global Collateral Pool: Will Fund Managers Profit?
With collateral potentially becoming a scarce resource over the next few years, securities depositories are quickly stepping up to the plate to ease access, but it remains uncertain just how much their new services will help the most needy: fund managers. The announcement of the alliance between two mega market infrastructures — international securities depository Euroclear in […]
Fund Managers: Raising the Operational Bar for Uncleared Swaps
With regulators on both sides of the Atlantic wanting bespoke swaps trades to fall under new margin guidelines, fund managers can ill-afford to sit idly by and rely simply on the negotiating skills of their legal advisors to come up with the best terms possible. Buy-side firms will need bring the so-called uncleared swap transactions […]
Fund Managers: Picking the Best Clearinghouse, Intricate Juggling Act
Fund managers can no longer afford to view clearinghouses as stodgy infrastructures which just exist for the sake of servicing mega broker-dealers and banks. With regulators now requiring far more transactions — particularly in the over-the-counter derivatives market — to be processed through clearinghouses, asset managers must realize they have some choices to make and […]
Fund Managers Tell Off US FINRA on TBA Margin Rules
Fund managers are up in arms about new rules proposed by the US Financial Industry Regulatory Authority (FINRA) requiring the collateralization of many US-forward- settling agency mortgage-backed securities transactions, or those of similar asset classes, and their potential quick liquidation trades in a worse case scenario. While FINRA has direct oversight only over US broker-dealers, […]
New Swaps Clearing Rules Trigger Services Shakedown
Brave new ideas, especially when they are mandated by regulators, typically trigger a messy shakedown of systems and services — out with the old, in with the new with a lot of cost and waste lying by the roadside for others to benefit. Such is the case with the multi-faceted regulatory drive to squeeze potential systemic risk out […]