Just wrapped up a week in sunny San Diego covering the SIFMA Ops conference. Hours and hours of great speakers and insights. A few observations:
SEC Commissioner Kara Stein is ambitious: As covered earlier this week on this site, Stein wants to revolutionize the way data is gathered and analyzed at the SEC. She sounds a lot like Scott O’Malia did during his days at the CFTC. O’Malia didn’t bring the CFTC up to speed before he left for ISDA. Given the budgetary and political landscape, the odds seem long that Stein will have any better luck at the SEC before she departs for her next gig.
If Richard Berner shouted in a forest and no one was around, would he make a sound?: Berner and the team at the Office of Financial Research are doing tremendous work. They produce great research and analysis, but I am just not sure how many people are reading it. (read more…)
According to Richard Berner, the director of the Treasury Department’s Office of Financial Research, the financial crisis exposed critical gaps in the data, analysis and policy tools required to ensure financial stability. Berner should know, because his office was created via the Dodd-Frank Act to provide a place where varied research related to financial markets could be collected, studied and shared.
Berner took to the stage this week at the 42nd Annual SIFMA Operations Conference and Exhibition and highlighted one specific initiative he deemed “critical” to enhancing financial stability: the global adoption of legal entity identifiers.
“The global LEI is the cornerstone for financial data standards,” Berner said. “Had the LEI system been in place in 2008, the industry, regulators, and policymakers would have been better able to trace Lehman’s exposures and connections across the financial system.”
As a tool, Berner said LEIs represent a key starting point for the OFR as it works to better understand the complexities of financial markets. (read more…)
SmartBrief will be traveling to San Diego next week to cover SIFMA OPS 2015. In advance of the event, we asked Tom Price, Managing Director, Operations, Technology and BCP for SIFMA to tell us more about what we can expect.
For 42 years, SIFMA’s annual Operations Conference & Exhibition has gathered broker-dealers and asset managers to discuss the evolution of operations and regulation in the industry.
As over 800 industry professionals convene in San Diego next week, a multitude of reforms and initiatives are either in progress, under review, or pending approval of a new rule. OPS 2015 will provide valuable information on what to expect in the year ahead, and the tools that are available to firms to prepare for the changing operational landscape and to manage operational risk.
This is a content-driven event with a packed program. I’ll be hosting an in-depth breakout session on how the Consolidated Audit Trail (CAT) is fundamentally changing reporting requirements. (read more…)
OpenGamma is developing an open-source method for the calculation of margins on bilateral derivatives transactions, the company has announced. OpenGamma is working with OTC derivatives market participants on the project.
This represents the first time that open access for margining source code will be available across industry participants, enabling full transparency of independent, verifiable margin calculations for OTC derivatives trades that will not be controlled by any entity. The OpenGamma source code will be made available for incorporation across utilities and trading systems in what the company hopes will usher in a new era of consistency and openness.
“With capital scarce, financial firms are more focused than ever on developing high-value, proprietary innovations rather than re-creating industry-standard methodologies,” said Mas Nakachi, OpenGamma CEO. “That’s why we’re working with the industry to streamline and democratize the development of market structure solutions, which also fundamentally reduces operational and systemic risk through the inherent transparency of open source code. (read more…)
SunGard has announced the introduction of a new utility to help global market participants meet regulatory pressures related to cleared OTC derivatives and post-trade futures. The utility will leverage technology to gain efficiencies, reduce risks and lower costs for global capital markets firms’ middle and back-office functions.
SunGard’s utility will provide customers with technology services and derivatives clearing operations for trade clearing, lifecycle management, margin processing, brokerage, reconciliation, data management and reporting to meet regulatory compliance needs. SunGard’s global back-office processing system for listed and cleared OTC derivatives that covers 160-plus cleared derivatives markets worldwide will supply the underlying technology to power this utility.
“Post-trade cleared derivatives processing is highly commoditized, providing little differentiated value to each firm at increasingly higher costs due to today’s regulatory environment. SunGard’s post-trade derivatives utility will help transform the cleared derivatives middle and back office across the entire industry, resulting in a more sustainable operating model and cost structure for the future,” Brian Traquair, the head of SunGard’s capital markets business, explained on the sidelines of the 40th Annual FIA International Futures Conference. (read more…)