OTC Derivatives and the Question of When: Twitterview

By | March 16, 2011

Tony Scianna from Sungard and I discuss when derivatives reform will finally be implemented and what people must thing about when preparing for that fateful day.

(Also posted at blogs.sungard.com and available via Twitter under hashtag #DerivChat.)

Alyssa4AR: Welcome to #derivchat! Today we’ll be talking with @kmcpartland of @TabbFORUM and @tonyscianna of@SGBrokerage at SunGard.

Alyssa4AR: Follow the #derivchat conversation by using the hashtag. Thanks for joining, @kmcpartland & @tonyscianna. Ready to get started?

Kmcpartland: Glad to be part of #derivchat, @Alyssa4AR. Looking forward to discussing OTC #derivatives today with you and @tonyscianna

Tonyscianna: Likewise, @kmcpartland @Alyssa4AR. Let’s get started #derivchat

Alyssa4AR: Let’s jump right in. @kmcpartland, you recently wrote: OTC Derivatives: Not What, But When. What makes “when?” such a big Q? #derivchat

Kmcpartland: They will finish most of the rules on time, but the implementation times are up in the air. Q1 2012 we will start to see change. #derivchat

Tonyscianna: I agree. In my opinion, the regulators will move forward faster then we expect and require some form of compliance by 2012. #derivchat

Alyssa4AR: And there is a lot to accomplish btwn now & 2012. What are some of the key business challenges re: central clearing of OTC? #derivchat

Tonyscianna: Firms need to be able to capture data, normalize it and access it in real-time or near real-time … #derivchat

Tonyscianna: …to meet reqs such as intraday reporting. But a lot of info is locked in legacy systems & silos and batch processes #derivchat

Kmcpartland: Then there is connectivity to CCPs, SEFs and the new data sources @tonyscianna mentioned. #derivchat

Alyssa4AR: With the “when” now on the horizon, what needs to be done in terms of technology? #derivchat

Tonyscianna: Firms need to align tech w/new reg reqs, & be able to not only get info in real-time but cross-reference data from mult sources #derivchat

Kmcpartland: Most of this falls on the brokers. PB platforms, execution platforms, the clearing infrastructure. All need major revamps… #derivchat

Kmcpartland: …Buy side clients are depending on their brokers in this regard. #derivchat

Alyssa4AR: From @CFTC O’Malia: So Many Regulations, So Little Time http://on.wsj.com/haMvcX. What does this mean for firms asking “when?” #derivchat

Kmcpartland: O’Malia recognizes importance of these rules & doesn’t want to rush. Politics say they’ll hit deadlines for most things though. #derivchat

Tonyscianna: Also means you need to build your enterprise data management solution NOW to be prepared. #derivchat

Tonyscianna: Soon, no matter where you are or what regs apply to you, you’ll need to report every transaction & it can’t be a week later #derivchat

Kmcpartland: And this is global. Europe isn’t as far behind as some think. The MiFID Review will require major changes as well #derivchat

Alyssa4AR: Keeping with the theme of “when,” let’s fast forward to next year. What will we be talking about in 2012? #derivchat

Tonyscianna: Don’t know what new challenges will come up, but believe we’ll be talking about same issues but w/ more clarity from regulators #derivchat

Kmcpartland: Hopefully we’ll be talking about how liquid the vanilla swaps market has become, and which SEF has the liquidity! #derivchat

Alyssa4AR: That closes #derivchat! Thanks to @kmcpartland and @tonyscianna and everyone who followed.

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