The regulatory community is hell bent on increasing transparency into the derivatives market by any means necessary, including forcing OTC instruments to be cleared via central counterparties (CCPs) and requiring firms to report more data to new trade repositories. A-Team Insight speaks to Steve Ingle, derivatives product manager at BNY Mellon Asset Servicing, to find out how all of these changes are impacting the way firms deal with data.
As noted by A-Team Insight earlier this year (see 
Forcing all OTC derivatives trades to be centrally cleared will result in a whole host of unintended consequences, including a potential increase in systemic risk, agreed a panel of sell side firms and vendors at a recent SunGard event in London. Clearing via central counterparties (CCPs) has been on the regulatory agenda for some time (see McCreevy’s comments at the start of last year for example, see 
As part of its endeavour to establish itself as a clearing counterparty (CCP) in the OTC derivatives market, CME Group has this month selected two pricing solutions to support its CCP’s credit default swap (CDS) pricing and intraday risk management services: CMA’s DataVision and Fitch Solutions’ CDS Pricing Service. Anna Mazzone, vice president of product management and marketing at CMA, explains to A-Team Insight how DataVision will support CME Group’s OTC CDS Clearing service.
In a similar vein to the G20 talks throughout the course of last year, Shyamala Gopinath, deputy governor of the Reserve Bank of India, has this month been discussing regulatory reforms aimed at reducing the risk around OTC markets via greater transparency and introducing new liquidity risk reporting measures. Gopinath is keen for the country to begin work on tackling the “key elements” for reform, she explained to a gathering of the Fixed Income Money Markets and Derivatives Association - Primary Dealers Association of India at the start of January.
The European Central Bank’s (ECB) Target2-Securities (T2S) project has proved to be a controversial topic for some time and news this month that the launch of the new pan-European settlement system may be delayed by up to a year is unlikely to change matters. The ECB has confirmed that it has completed the approval process for the project’s general specifications, but the central bank has indicated it will be updating its programme plan at the end of February, which is rumoured to include a postponed launch date.
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There has been a lot of discussion about the pros and cons of mandating clearing for OTC derivatives (see coverage of recent industry comments here) and the comments received so far by the European Commission on the subject have tended to focus on a proportional, rather than broad brush, approach to the reforms. The European Banking Federation’s (EBF) response, for example, has been to call for a step by step approach to adding the various classes of derivatives to central counterparties (CCPs) in order to bring down counterparty risk without increasing systemic risk overall.
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