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…)
Nasdaq is aiming to shake up the exchange landscape with the launch the new Nasdaq Futures energy market. The launch of the new market, which was announced on the sidelines of the 40th Annual FIA International Futures Conference, has the support of leading participants and will offer clearing for options and futures based on benchmarks for oil, natural gas, U.S. power and other key energy commodities.
Founding participants in the new market include ABN AMRO Group, Advantage Futures, Goldman Sachs, JPMorgan, Morgan Stanley and Virtu Financial. In addition to these founders, Nasdaq Futures has the support of other major trading firms, futures commission merchants and inter-dealer brokers. The products will be cleared through The Options Clearing Corporation.
Nasdaq CEO Bob Greifeld acknowledged the move as a challenge to existing powers in the energy futures space by joking with the press pool, “What do CME, ICE and Hillary Clinton all have in common? (read more…)
Singapore Exchange plans to expand its suite of foreign exchange futures offerings in the third quarter with the addition of contracts for Renminbi crosses and the Taiwanese dollar. The additions, which were announced on the sidelines of the 40th Annual FIA International Futures Conference, are subject to regulatory approval and fall in line with the latest G20 changes affecting over-the-counter derivatives that call for a movement toward electronic exchanges.
The SGX Asian FX futures suite has hit $37 billion in aggregate notional value over its lifetime as contracts for the Indian rupee and Singapore dollar routinely break volume records. The exponential growth rate for Asian FX futures has mirrored strong, growing demand by investors worldwide for FX derivatives trades on a regulated platform that offers transparency and real-time pricing to coincide with Asian time zones.
“Global market participants can continue to draw on SGX’s unique platform to fulfill their investment needs and effectively manage their Asia-wide exposures across multiple asset classes in the Asian time zone,” said SGX CEO Magnus Böcker, who has announced he is leaving the exchange in June of this year. (read more…)
Interactive Data and GlobalRisk marked the beginning of the 40th Annual FIA International Futures Conference on Tuesday by announcing they have entered into an alliance to provide multinational brokerages, future commissions merchants and clearings exchanges better insight into trading activities that will reduce costs and risk across functions, whether front- or back-office.
GlobalRisk is incorporating Interactive Data’s pricing feeds into its FirmRisk solution. The real-time or delayed options and futures pricing feeds from Interactive Data’s Consolidated Feed will enable stress testing of data, intraday risk calculations and real-time analysis of trading data, deepening firm insights when they most needed.
“The regulatory focus on risk management in the equities, futures and options industry has demonstrated a need for a reliable, real-time view of trading risk exposure,” said GlobalRisk’s Curt Wichmann. “Since 2008, we have seen a dramatic increase in business driven by risk management, and our relationship with Interactive Data has allowed us to provide the most up-to-date data available to service our clients.”
Interactive Data’s Emmanuel Doe praised the new, combined solution for its ability to “deliver powerful data analytics and provide breadth and depth of coverage to GlobalRisk’s risk management solution.”
“To maintain a competitive edge, firms must be able to acquire global and aggregated content from a large number of sources, trading venues and asset classes, coupled with a complete service which is turn-key to manage their risk,” he said. (read more…)