2014 2020 Strategies for OTC derivatives

Y2014 -Year ZERO

D day-February  12, 2014

• a new reporting for OTC  derivatives takes an radical effect in Europe
• panic of present unprepared OTC derivatives market participants
• The lack of understanding what is going to happen
• The lack of clarity about exactelly what is required

Expect the Unexpected

• new kind of communication between buy side and brokers
• shift away from off exchange trading
• shift towards standardised derivates trading and clearing
• radical changes of rules and regs
• changes of derivatives trading reporting
• SIBOS –new trends

CCP (centralcounterparty) services

• LCH Clear net Group, CME Europe, ICE Europe, EurexCleraring
• IOSCO 2013 principles for Financial Market Infrastructure
• more than 40  different regulators
• 2014 year of EMIR and Dodd-Frank reforms
• CFTC    
• ESMA
• 2014 most of firms will not be ready to comply
• will miss February12 deadlines
• Year of highcosts
• Huge drain of skilled manpower
• Huge drain of resources
• More than dozen of new unique identifiers must be written

Basel III and Counterparty Risk Management

• London with USD 4 trillionFX daily global transaction in October2013
• CVA –Credit Valuation Adjustment
• OIS Overnight Index Swap
• HedgingCDS
• Asset classes    as rates, FX, equity, commodities, credit

The oldhierarchies are broken

• new form of risks
• new form of components
• new order types
• Chicago based Hedge Fund Research
• Dissorder may not be under control
• Different matching during margin calls
• Significantly increased costs for transparently new bilateraly traded contracts

Unclear regulation

• FOA  Futures and Option Association,
• Working groups of EACH
• new back offices tools
• We are still heading for another crisis
• We have move to a world that has less trading in it

A new Chaos world modelling

• Identifying critical trends and potential discontinuities
• mega trends are tectonic shifts
• Urgency and opportunity for new networks and coalition partners
• Emerging markets regulators