Post-Trade Forum

The Post Trade Forum's aim is to propagate debate and discussion between senior practitioners in Post Trade Operations in the global securities market; to bring about increased awareness and knowledge across both buy-side and sell-side financial institutions in financial products and be a focal point for firms and practitioners to air views.

Retired Member 

Are CCPs Increasing Risks? Part III

I've let the ball drop on blogging for the past few weeks, but have been thinking a lot about the issues. The Post Trade Forum debate on Are Clearing Houses Increasing Risk? will take place on Tuesday morning at the London Stock Exchange. I've just finished my key note presentation for the debate, and I'm afraid I come down on the side of incr...

15 April 2012 /regulation

Gary Wright Analyst at BISS Research

Is T2S still relevant?

Way back in 2006 the idea of T2S became a reality. In the years since the creation of the Euro, the European securities markets have continued to lag badly behind the European project to create a single financial market. Unfortunately, this is still the case today, with severe settlement drag, as each country operates different and very varied, cl...

03 April 2012

Gary Wright Analyst at BISS Research

A new Clearing House; new law brings consolidation closer

News that NYSE Euronext is planning to build their own Clearing House for derivatives and is very interesting and a possible indictment of the quality of choice of alternative Clearing Houses in the market. It was obvious that there would be some moves by NYSE Euronext away from LCH.Clearnet as soon as the London Stock Exchange Group increased the...

30 March 2012

Gary Wright Analyst at BISS Research

The financial inevitability of Clearing House consolidation

In Europe we are blessed (If that’s the right word) with many Clearing Houses. We are told that this provides competition and drives down prices while producing an environment for innovation. Can anyone point out where any of these benefits are accruing? Where is the proof that investors are getting a better economic deal and what was the most rec...

20 March 2012

Retired Member 

Are CCPs Increasing Risks? Part II

Yesterday's post looked at the big risks in the CCP landscape from simultaneous requirements for mandatory margin, novated contract terms, complex portfolio and collateral valuations, reference data reforms, and default funds. Today we'll look at the competitive differentiators that potential CCP members, sencond tier swaps dealers, and even end ...

16 March 2012 /regulation

Gary Wright Analyst at BISS Research

Who owns what in a CCP default

Clearing Houses are becoming even more important in the markets as regulatory and political change forces OTC into their systems and onto their balance sheets. Who knows if the balance sheets of Clearing Houses will be able to cope? We hope and expect that the regulators and the Treasury will make sure there is enough capital in place or at least ...

14 March 2012 /regulation

Gary Wright Analyst at BISS Research

Rating Collateral

One of the major problems in the stabilisation of securities markets is to find a recognised and standard mechanism to rate the quality of collateral. Clearing Houses have their own methods of assessing the quality of the collateral pledged by financial services firms but this has to be more transparent. With global markets intertwined it is imper...

09 March 2012 /regulation

Gary Wright Analyst at BISS Research

What happens when a Clearing House goes bust?

Today the chances that a Clearing House will default in the future have never been more likely. Political pressure and regulatory resolve is creating a risk concentrator within the clearing houses so that it’s not if a Clearing House goes bust but when. The introduction of OTC derivatives into clearing will be the trigger to a thermal time bomb in ...

07 March 2012 /regulation

Retired Member 

My Views on Third Party Securities Lending

There was a survey of US plan sponsors put out by a consultant last month that included some commentary on “unbundling”. Unfortunately the survey is a subscriber only document, so I haven’t read it, but I have spoken with a number of people who are subscribers and of course there are the various media reports. Virtually every news item focused o...

14 February 2012 /wholesale

Gary Wright Analyst at BISS Research

An old world for Stock Borrowing and Lending

The announcement of the ESMA industry consultation relating to this year’s implementation of new regulations for the revision of the markets for short selling, including stock borrowing and lending can only be welcomed. However, it’s really ironic that the thrust of the concerns around stock borrowing and lending appear to me to be an admission t...

30 January 2012 /sibos