Fine Print As Yet Unwritten, But the Gist is Clear for OTC Derivatives

Oct 4th, 2011 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Operations and Risk Management, Hedge Fund Regulation, Today's Post | By:
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By Christopher Faille

TABB has put out a report on the development of clearing technology for over-the-counter derivatives, called “OTC Derivative Clearing Technology: Bringing the Backoffice to the Forefront,” which projects that sell-side institutions and other market participants will in 2011 alone spend more than $12 billion on technologies related to clearing. This sum includes expenditures on trade matching, valuation, novation, trade accounting, reporting, and processing. The part of that pie related to OTC derivatives is the largest slice.
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Author Bio:
Christopher Faille is a Jamesian pragmatist. William James has taught him, for example, that "you can say of a line that it runs east, or you can say that it runs west, and the line per se accepts both descriptions without rebelling at the inconsistency."

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  1. [...] The race to real-time clearing in OTC [...]

  2. When some credit instruments such as bank loans, bank debt, and other bonds can sometimes take a month or more to settle, it will seem strange for the associated CDS on the same name to settle instantly. Arbitrageurs may seek to speed up settlement in the cash credit markets.

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