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2014 2020 Strategies for OTC derivatives

Y2014 -Year ZERO

D day-February  12, 2014

  • a new reporting for OTC  derivatives takes an radical effect in Europe
  • panic of present unprepared OTC derivatives market participants
  • The lack of understanding what is going to happen
  • The lack of clarity about exactelly what is required

Expect the Unexpected

  • new kind of communication between buy side and brokers
  • shift away from off exchange trading
  • shift towards standardised derivates trading and clearing
  • radical changes of rules and regs
  • changes of derivatives trading reporting
  • SIBOS –new trends

CCP (centralcounterparty) services

  • LCH Clear net Group, CME Europe, ICE Europe, EurexCleraring
  • IOSCO 2013 principles for Financial Market Infrastructure
  • more than 40  different regulators
  • 2014 year of EMIR and Dodd-Frank reforms
  • CFTC    
  • ESMA
  • 2014 most of firms will not be ready to comply
  • will miss February12 deadlines
  • Year of highcosts
  • Huge drain of skilled manpower
  • Huge drain of resources
  • More than dozen of new unique identifiers must be written

Basel III and Counterparty Risk Management

  • London with USD 4 trillionFX daily global transaction in October2013
  • CVA –Credit Valuation Adjustment
  • OIS Overnight Index Swap
  • HedgingCDS
  • Asset classes    as rates, FX, equity, commodities, credit

The oldhierarchies are broken

  • new form of risks
  • new form of components
  • new order types
  • Chicago based Hedge Fund Research
  • Dissorder may not be under control
  • Different matching during margin calls
  • Significantly increased costs for transparently new bilateraly traded contracts

Unclear regulation

  • FOA  Futures and Option Association,
  • Working groups of EACH
  • new back offices tools
  • We are still heading for another crisis
  • We have move to a world that has less trading in it

A new Chaos world modelling

  • Identifying critical trends and potential discontinuities
  • mega trends are tectonic shifts
  • Urgency and opportunity for new networks and coalition partners
  • Emerging markets regulators

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