Our point of view on industry issues
The industry is rapidly evolving . The things that may have kept you up at night last year have likely been replaced with new headlines, filled with emerging trends and market developments. Omgeo’s position among trade counterparties, industry associations and regulatory bodies gives us a unique perspective on the issues that affect our community. We are pleased to share our points of view.*

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Ted Leveroni
Executive Director of Derivatives Strategy and External Relations

 
FINRA Looks to Expand Margin Requirements
18 June, 2014
FINRA’s proposed changes to margin requirements will create operational and technical challenges that come with implementing an efficient, comprehensive collateral management process. Even one single missed margin call among thousands of properly processed calls will have a negative financial impact on a firm.
 

Ted Leveroni
Executive Director of Derivatives Strategy and External Relations

 
Exchange Traded Derivatives in an Automated World
11 June, 2014
Though there has been an industry wide focus on compliance, many firms have not focused on the operational requirements needed to comply efficiently and without added risk. In this article, Ted Leveroni talks about the operational impact of global regulatory reform in the derivatives space and how firms should prepare.
 

Tony Freeman
Executive Director of Industry Relations

 
Inching Toward SSC -- SGX’s Implementation of T+2
3 March, 2014
As part of a plan to strengthen the securities market in Singapore, the Singapore Stock Exchange (SGX) and Monetary Authority of Singapore (MAS) announced that, among other steps, they intended to shorten the settlement cycle from trade date plus three days (T+3) to T+2 days by 2016.
              

Sheldon Warrick
Executive Director, Relationship Management

 
The Trouble with Brazil's Post-Trade Automation in a Global Economy
21 February, 2014
The creation of wealth in Latin America, through stable economic growth, has resulted in a burgeoning domestic fund management industry, making it an established and important constituent in the global investment community.
              

Matt Nelson
Executive Director, Strategy

 
Automation, Risk Management and Investor Due Diligence Set the Agenda for Hedge Fund Operations in 2014
19 February, 2014
Hedge fund managers are competing in a world in which investment alpha is becoming harder to
generate. Challenging markets, the move of over-the-counter investment products to exchanges,
tightening spreads in asset classes such as foreign exchange, and increasing competition in the capital markets are all driving industry participants to look for innovative ways to stay ahead of the competition and derive alpha from previously untapped sources.  
              

Ted Leveroni
Executive Director of Derivatives Strategy and External Relations

 
An Unfinished Tapestry
8 January, 2014
The collateral story continues to attract attention from participants in the derivatives market, and concerns over the potential collateral squeeze are still evident in the industry. The new rules relating to how and where trades are executed, settled and cleared will, as a consequence, place a strain on collateral availability.
 

Ted Leveroni
Executive Director of Derivatives Strategy and External Relations


 
New MBS Requirements Create Clear and Present Danger
23 December, 2013
Margin recommendations for all forward-settling agency mortgage-backed securities that go into effect on Jan. 1 could mean a New Year full of operational deficiencies, legal gridlock and a lack of collateral know-how for the asset management industry.
 

Ted Leveroni
Executive Director of Derivatives Strategy and External Relations

 
Collateral Management - A Forward Look
10 December, 2013
An inevitability of the global financial crisis was that collateral management would rise in importance in the derivatives market. This is a completely positive development. Put simply, posting collateral protects firms against a defaulting counterparty: therefore, a healthy, functioning collateral management system is critical to risk mitigation, and ultimately, the safety and stability of the financial markets.
 

Ted Leveroni
Executive Director of Derivatives Strategy and External Relations

 
New Collateral Requirements Could Be an Operational Nightmare for Asset Managers
4 December, 2013
The asset management industry faces a clear and present danger to their day-to-day operations in the New Year with the implementation of The Federal Reserve Bank of New York’s Treasury Market Practice Group’s (TMPG) margin recommendations for all forward-settling agency mortgage-backed securities (MBS), typically transacted as To Be Announced trades (TBAs).
 

Tony Freeman
Executive Director of Industry Relations



 
Shorter Settlement Cycles – What Does This Mean for Australia and New Zealand?
4 November, 2013
In a market increasingly under pressure from regulatory change, globalisation and cost-pressures, one impending development in financial markets is going relatively unremarked - the global trend towards shorter settlement cycles. Yet this change will have a significant impact on Australasia.
              

Ted Leveroni
Executive Director of Derivatives Strategy and External Relations

 
OTC Derivative Regulations' Impact on Asian Hedge Funds
16 September, 2013
Hedge fund managers are among those in the global financial space facing immense regulatory pressure. The burden they face is particularly acute, due partly to the industry's use of over-the-counter derivatives, an area under considerable scrutiny by regulators, as part of strategies designed to generate higher overall returns.
 

Tony Freeman
Executive Director of Industry Relations

 
I See the Train a'Comin'
13 September, 2013
The European Commission’s proposal for a Central Securities Depository Regulation (CSD-R), which includes measures for the harmonisation of settlement cycles to T+2, is now in the final stages of policy making. With broad acceptance that T+2 will complete its relatively uncontested passage into legislation, it is now time for investment managers, sell-side institutions and custodians to make sure that they are ready to adhere to new settlement practices.
              

Tony Freeman
Executive Director of Industry Relations

 
You Can Only Move One Cow Through a Gate at a Time
10 September, 2013
A senior official of the Irish Presidency at the European Commission once said that the European regulatory agenda was overcrowded. I think most market participants would tend to agree with the statement, despite the general acceptance that the regulatory reform agenda is critical to the ongoing safety of the financial markets. 
              

Clare Fraser
Managing Director, Strategic Planning

 
Adding Value
4 July, 2013
The middle-offices of financial institutions have traditionally been seen as cost centres, with little to contribute to the overall performance of the firm, but a necessity nonetheless. There has, however, been a relatively rapid change in attitudes towards the middle-office since the global financial crisis, driven by the need for greater efficiency, risk mitigation and compliance with global regulations.
              

Clare Fraser
Managing Director, Strategic Planning



 
Best Practice in the Middle Office Matters More Than Ever
2 July, 2013
As the ongoing quest for new sources of alpha requires a wider adoption of new and multi-asset-class trading strategies, the middle office is next in line for significant reform. Firms must adopt best practices in the middle office and invest in the necessary automation.
              

Marianne Brown
President and Chief Executive Officer

 
Comment: Europe Faces Settlement Race
28 June, 2013
European policy makers are putting the finishing touches to new laws around settlement, contained in the Central Securities Depositories Regulation (CSD-R). One of the most significant measures contained within in it is the harmonisation of European settlement cycles, the period after a trade has been executed. Currently it is usually a two or three day timescale and Europe wants a uniform period of two days. The switch, known in the industry as T+2, is due to come fully into effect in January 2015.
              

Matt Nelson
Executive Director, Strategy

 
Innovation in Financial Services Isn't Dead - It's Different
27 June, 2012
Innovation has been a constant in the financial services industry for years, although it can often seem like we’re mired in legacy systems, processes and business silos. There are numerous examples; the paper crisis of the 1970s gave rise to the first electronic trade confirmation system. Order management systems revolutionized trading and communication between counterparties. Risk and analytic systems altered the way that portfolios are constructed and managed. Regulation in the early 2000s gave rise to new trading venues and mandated best execution.  
              

Ted Leveroni
Executive Director of Derivatives Strategy and External Relations

 
Upcoming TBA Margin Requirements
24 June, 2013
The TMPG best practice recommendation is a significant development for the industry. And its significance is compounded by a relatively aggressive implementation timeline. Market participants are expected to show “significant progress” toward a margining solution by June and have their margining process “substantially complete” by the end of the year.
 

Ted Leveroni
Executive Director of Derivatives Strategy and External Relations

 
Clearing and Collateral Countdown
21 May, 2013
Within a matter of weeks, central clearing requirements for interest rate and credit default swaps will be introduced in Europe. Ted Leveroni, executive director of derivatives strategy at Omgeo, discusses the collateral implications of the new rules and market participants’ operational readiness.

Marianne Brown
President and Chief Executive Officer

 
Shorter Securities Settlements Cycles to be Introduced in Europe
1 May, 2013
Earlier this year, the European Commission published its proposals for the regulation of central securities depositories (CSDs), the entities that operate settlement systems. The proposals, known as the Central Securities Depositories Regulation (CSDR), seek to improve settlement efficiency across European markets, and are currently working their way through the European Parliament and Council.
              

Tony Freeman
Executive Director of Industry Relations

 
The Five Stages of Loss and Grief: Recovering from the Collapse of Lehman Brothers
29 April, 2013
2013 marks the fifth anniversary of the collapse of Lehman Brothers. It is important that we remember the lessons learnt in the tumultuous weeks following the bank’s default, when the financial markets suffered what many felt to be a near-death experience.
              

Clare Fraser
Managing Director, Strategic Planning

 
Why Market Participants Should Invest in Post-Trade Settlement Best Practices
28 March, 2013
Regulatory change can dramatically improve the global post-trade environment. But in the meantime, market participants need to embrace industry best practices. In today’s challenging market environment, the need to invest in operational infrastructure to lower risk or implement industry best practice — even if it translates to cost savings and increased efficiency in the long term — is generally outweighed by the immediate need to reduce spending or meet increasing capital requirements.
              

Tony Freeman
Executive Director of Industry Relations

 
The Business Case for Shortened Settlement Cycles
27 March, 2013
Recently, the Boston Consulting Group (BCG) conducted a cost-benefit analysis of shortening the U.S. settlement cycle from T+3 to T+2, or even T+1. While BCG didn't take a position in the discussion, the study found that the majority of market participants surveyed would support a move to shortened settlement cycles (SSC), and many viewed it as a top priority. 
              

Marianne Brown
President and Chief Executive Officer

 
Building the Back Office Superhighway
15 March, 2013
Market participants and regulators have focused on modernizing front-office trading systems, but nowhere is the need for increased automation more apparent than in the middle and back offices...For decades much of the industry focus has been on the need for greater automation in the front office, which has sometimes been described as a superhighway.
              

Ted Leveroni
Executive Director of Derivatives Strategy and External Relations

 
Why Automating Collateral Management is Good for the Markets
1 March, 2013
The derivatives markets have been under a microscope over the past few years as regulators and the industry work together to find ways to take risk out of the markets without negatively impacting returns. Evolving regulatory demands, increased investor pressure and elevated board level focus are requiring firms to bolster their operational and risk management capabilities...
              

Tony Freeman
Executive Director of Industry Relations

 
STP Saves Time and Reduces Cost
25 February, 2013
Since the advent of mainframes in the financial services sector, the term ‘straight-through processing’ [STP] has been with us to describe the on-going integration of the front, middle and back office, connecting parties to each trade electronically in order to reduce inefficiencies – and risk.  
              

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*All posts by the author, guest author and visitors reflect their personal thoughts and opinions which are not necessarily those of Omgeo. Omgeo is not responsible for any inappropriate, offensive, harmful or unlawful remarks such persons might make when expressing their personal views on a matter.