The Future of OTC Derivatives Processing - an Industry Sector in Flux

2010 is the year of unfinished business.

New industry initiatives aiming to address inefficient and faulty areas of the OTC derivatives post-trade processing space have launched while others market changes are in the works. All the while regulators and legislators on both sides of the pond continue to deliberate on reform of the OTC derivatives market. 2010 may seem like it will be more of the same but the introduction of new regulation will undoubtedly revolutionize the industry.

In short, there are many questions to be answered about how planned market changes will impact the OTC derivatives market in years to come. No action comes without consequences and 2010 is expected to be the year where unfinished business will be settled – for better or for worse.

For DerivSource members, you are already aware that we provide daily news updates, market commentary and industry analysis articles and educational resources. This year however, we are stepping it by hosting a series of Webinars that aim to provide some much needed clarification and education on different elements of the changing derivatives space.

“The Future of OTC Derivatives Processing - an Industry Sector in Flux” kicks off our series on January 21st. This Webinar is a “Year in Preview” where a panel of industry experts (representatives from SIFMA, BBH, Aite Group & Chatham Financial) will offer insight into various timely topics including regulation, central clearing of CDS, the OMG commitments and other market-wide changes. Other Webinars covering central Clearing for CDS and other related topics are coming soon so stay tuned for these event announcements. Also, DerivSource members receive a 50% discount on all events.

In the meantime, here is a compilation of DerivSource’s top opinion/commentary pieces, popular research papers and other recommended websites/resources to provide insight into current trends and market developments. Collectively, the views expressed in the articles below should give a readers a head start for understanding the major market trends and changes we expect in the coming 12 months and beyond.

Keeping Derivatives Alive –2009 Columns on How Credit Crisis is Impacting OTC Derivatives Market

Have Reports of the Death of OTC Derivatives Been Greatly Exaggerated? - Sean Sprackling, ISC

The Future of OTC Derivatives - Keeping Business Alive - Stephen Bruel, TowerGroup

Central Clearing of CDS

Central Clearing Credit Default Swaps: The Buyside Perspective - Peter Meechan, Bill Hodgson

Credit Exposure Management Post Crisis (a series of three articles) - Bill Hodgson

Derivatives Regulation

Derivatives Compass - Are You on Course? - Rob Wood, JP Morgan

Trading & Transparency: Improving Efficiency without Sacrificing Innovation - Lee Olesky, TradeWeb

Derivatives Regulation Timeline - a reference tool

Other websites for regulation information include:

http://www.savemyswaps.com/

http://www.hedgingworks.com/

Operations Management Group (OMG) Commitments

Spotlight Series on OMG Commitments - A series of four articles covering various goals outlined by the OMG in letters to the regulators. The articles cover changes in the CDS market, electronic trading of OTC equity derivatives, new trends for lifecycle management and portfolio reconciliation and were contributed by Sapient analysts and TriOptima.

The Rise & Sprawl of CDS - Christopher Natale

Lifecycle Event Processing - the New Game Plan - Christopher Natale

Electronic Matching: the Challenges Facing the OTC Equity Derivative Market - Christopher Natale

Outsourcing in a New Economy - Chip Register

Proactive Portfolio Reconciliation Can Transform OTC Derivatives Margining - Susan Hinko

SIFMA Offers Framework for OTC Derivatives Risk Management - Related News (SIFMA)

Trade Data Repositories for OTC Derivatives Markets

When is a Data Repository Not... – a series by data warehouse expert and industry consultant, Simon Hopper

Pricing & Valuations

Insurers: Changes in Pricing & Risk Management Practices for Variable & Fixed Annuities in the Current Climate - Mark Hadley, Numerix

Transparency, FAS 157 & Independent Pricing - Chris Zingo, SuperDerivatives

Collateral Management

How are Investment Managers Improving Collateral Management Practices Both Internally and Industry Wide? - Jack Dixon, Omgeo

ISDA Portfolio Reconciliation Feasibility Study Advances Understanding and Promotes Better Collateral Management Practices

Counterparty Risk Management

Quantifi Releases Paper Addressing Evolution of Counterparty Credit Risk Management - Quantifi (Popular Research Paper)

Market Commentary - Credit, FX and Money Markets