25 June 2017
download the report now

OTC clearing rules to spur big tech spending - Tabb

29 September 2011  |  8179 views  |  0 Circuit board

The global regulatory push to centrally clear over-the-counter derivatives has started a "technological revolution" that provides a big opportunity for vendors, according to a report from Tabb Group.

Following the global financial crisis, there has been a determination on both sides of the Atlantic - through Dodd-Frank and Emir - to introduce more central clearing for OTC derivatives as a way of increasing transparency and reducing risks.

Tabb estimates that as new trading and clearing mandates are implemented, transaction volumes could increase twentyfold with market data volumes rising three to four times above current levels.

To help deal with the consequences of these new rules, OTC derivatives market participants will spend $3.4 billion this year on clearing and back-office technology alone, says the report, which draws on interviews with industry players.

Despite the fully staffed IT teams and eight-figure budgets at big global dealers and some clearing houses, building this infrastructure will be difficult without third-party assistance, says report author Kevin McPartland.

"Technology providers have already stepped in to revamp legacy systems and build new technology that solves many of the issues born from expected regulations. The biggest market participants will take a best-of-breed approach, utilising the best off-the-shelf products they can buy and tightly integrating them with systems that are built by in-house staff," he says.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Regulators seek to plug derivatives data gaps

Regulators seek to plug derivatives data gaps

24 August 2011  |  6782 views  |  0 comments
Dodd-Frank will push 60% of OTC volumes to central clearing

Dodd-Frank will push 60% of OTC volumes to central clearing

13 July 2011  |  12056 views  |  0 comments
Thomson Reuters moves to meet bank uncertainty over OTC rule shake-up

Thomson Reuters moves to meet bank uncertainty over OTC rule shake-up

11 July 2011  |  9032 views  |  0 comments
European OTC market far smaller than claimed - study

European OTC market far smaller than claimed - study

20 April 2011  |  8217 views  |  0 comments
OTC derivatives market reform stalling - FSB

OTC derivatives market reform stalling - FSB

18 April 2011  |  10608 views  |  0 comments
Iosco supportive of switch from OTC to exchange-based trading

Iosco supportive of switch from OTC to exchange-based trading

18 February 2011  |  10319 views  |  1 comments
EC bids to tame 'wild west territory' of OTC derivatives and short selling

EC bids to tame 'wild west territory' of OTC derivatives and short selling

15 September 2010  |  8420 views  |  0 comments
Dealers to accelerate central clearing of OTC trades

Dealers to accelerate central clearing of OTC trades

09 September 2009  |  8721 views  |  0 comments
US regulatory reforms to drive automation in OTC trading

US regulatory reforms to drive automation in OTC trading

14 May 2009  |  8149 views  |  0 comments

Related company news

 
download the report nowvisit www.finastra.comvisit vasco.com/news/PSD2-compliant-solutions

Top topics

Most viewed Most shared
Live: EBAday 2017, day twoLive: EBAday 2017, day two
9620 views comments | 4 tweets | 5 linkedin
Worldpay pilots app-only mPOS for small retailersWorldpay pilots app-only mPOS for small re...
9185 views comments | 18 tweets | 27 linkedin
Live: EBAday 2017, day oneLive: EBAday 2017, day one
8769 views comments | 3 tweets | 4 linkedin
UK banks will need to change one million sort codes under ring-fencing rulesUK banks will need to change one million s...
8222 views comments | 8 tweets | 25 linkedin
What Banks and their customers can expect for the futureWhat Banks and their customers can expect...
7228 views comments | 7 tweets | 10 linkedin

Featured job

Six Figure Base + Commission + Stock Options
London

Find your next job