A regulatory fine of US$50,000 might seem like a slap on the wrist for a large fund manager, but when an enforcement action from the US Securities and Exchange Commission makes its way into the agency’s press release and headlines from multiple media outlets it becomes a big concern for compliance and operations managers. In a new […]
Central Clearing for US Sec Lending: Coming Soon?
Central clearing: it’s a well-established concept for settling equities, fixed-income and now swap transactions. But not in the US securities lending market, where Eurex Clearing now wants to establish a new service, but could face an uphill climb, despite enlisting two of the world’s largest custodian banks BNY Mellon and State Street to help out. Granted, OCC in […]
2015: Top Ops Goals for Surviving the Regulatory Crush
With the beginning of 2015 just hours away, middle and back office operations specialists across the globe should count on a visit from C-level executives to set the tone for the new year. Forget about praise for all the hard work in 2014. Everyone now has to roll up their sleeves to address a host […]
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 […]
Securities Finance Data Analysis: A Wing and a Prayer?
Oh, what a tangled web we weave, or make that what regulators weave! If the Financial Stability Board (FSB) has its way, back-office operations executives at fund managers, custodians and broker-dealers will be working overtime to track down hoards of data on securities lending and repurchase agreements with no certainty it will be of any […]
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, […]
DTCC’s Institutional Tri-party Repo Clearing: Great Idea…Maybe
A recent proposal by the Depository Trust & Clearing Corp. to serve as the middleman for a large chunk of the institutional tri-party repo market through its subsidiary Fixed Income Clearing Corp. might sound like a great way to reduce counterparty risk and the potential for fire sale of collateral, but with so few details unveiled […]
T+2 in Europe: Smooth Sailing or Turbulence Ahead?
A non-event. That is how European securities depositories; their bank and brokerage participants, fund managers and software vendors describe the migration of over two dozen European markets to a two-day settlement cycle on October 8. Yet they are all realizing that they must keep up the good work in ensuring seamless middle office procedures. Relying […]
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 Struggle to Analyze Swap Transaction Costs
Transaction cost analysis — an everyday discipline in the equities and fixed-income markets referring to the total expense involved in completing a transaction — is now becoming more important to swaps players who need to reap the same benefits as their traditional investment peers. Unfortunately, the US$650 trillion swaps market remains dismally behind other markets, leaving […]