Webinar Q&A Questions:
Dear DerivSource Members,
Below is a selection of audience questions from yesterday's Webinar entitled: "The Future of OTC Derivatives Processing - an Industry in Flux."
Please feel free to start discussions on any of the below questions. You may reference the question number for threads. Please note also we will be discussing some of these questions in our next Webinar "Central Clearing of CDS - What's Next?"
Questions:
1. Do you expect migration of currently held standardized bilateral contracts to central clearing?
2. Do the panel have any input on the comments heard on the possibility / likelihood of some form or risk /capital charges being applied to exchanges or clearing houses. Or a Counterparty risk weighting being attributed to them prescripo?
3. Will CCPs be global in scope, or will Regulators force local CCP solutions within their region?
4. Do you believe that the Buy-side firms will be willing to bear the incremental cost of CCP processing?
5. How to prepare technology when differences in CCP processing exist (for example, the handling of interest accruals by ICE vs. CME)?
6. Has the goal of CLS Central Settlement now been superceded?
7. For the instruments which fall outside of central counterparty arrangements do you believe independent amounts will become mandatory, and if so how will they be agreed ie standard side letter to the CSA as to the rates to use etc?
8. In the triparty repo market, the Fed has expressed concern with the concentration of risk among third party service providers. Does a similar concern exisit in outsourcing OTC post-trade services, including collateral management?
9. To what extent will CCPs change the markets to allow for brokers and electronic platforms to intermediate in the OTC markets (e.g., true anonymity, narrower spreads, Bloomberg's VCON) on a more equal footing w/dealers and under what timeframe?
10. The buy-side can select multiple clearing dealers per executed clearable block trade, what is the benefit to the buy-side as apposed to multi bi-lateral trades?