29 September 2016
Visit dh.com

OTC clearing rules to spur big tech spending - Tabb

29 September 2011  |  7969 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  |  6515 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  |  11832 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  |  8861 views  |  0 comments
European OTC market far smaller than claimed - study

European OTC market far smaller than claimed - study

20 April 2011  |  8033 views  |  0 comments
OTC derivatives market reform stalling - FSB

OTC derivatives market reform stalling - FSB

18 April 2011  |  10357 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  |  10103 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  |  8233 views  |  0 comments
Dealers to accelerate central clearing of OTC trades

Dealers to accelerate central clearing of OTC trades

09 September 2009  |  8478 views  |  0 comments
US regulatory reforms to drive automation in OTC trading

US regulatory reforms to drive automation in OTC trading

14 May 2009  |  7940 views  |  0 comments

Related company news

 
Find out moreVisit colt.netFind out more

Top topics

Most viewed Most shared
RBS tests demonstrate ability of Ethereum to support a national domestic payments systemRBS tests demonstrate ability of Ethereum...
14443 views comments | 55 tweets | 48 linkedin
Ripple rudely gatecrashes Sibos partyRipple rudely gatecrashes Sibos party
9407 views comments | 30 tweets | 29 linkedin
Swift beware: Ripple signs banks to global payments steering groupSwift beware: Ripple signs banks to global...
9115 views comments | 33 tweets | 18 linkedin
BNP Paribas is working with clients on blockchain deploymentBNP Paribas is working with clients on blo...
7428 views comments | 14 tweets | 30 linkedin
US gets same day ACHUS gets same day ACH
7000 views comments | 23 tweets | 19 linkedin