business transformation

  • 335

    MIFID II: harmonization mandates new business models in the OTC space

    Regulatory initiatives, such as the Dodd-Frank Act and EMIR, have had a seismic impact on derivatives markets. The Financial Stability Board’s seventh progress report on the implementation of OTC derivatives market reforms has highlighted crossborder consistency issues arising from different jurisdictions. The combined effect of these regulations through the mandated electronic trading and central clearing of standardized derivatives contracts has been the “balkanization of the capital markets,” causing pockets of liquidity and varying prices for the same contracts across jurisdictions. With the implementation of MiFID II/MiFIR on the horizon in Europe, the industry is anticipating a more level playing field [...]
  • 319

    CROSS-ASSET UNIVERSAL PRODUCT IDENTIFIER: is this the solution the industry is looking for?

    Covering the entire spectrum of asset classes and financial services, from loans and credit cards to derivatives and bond positions, a Universal Product Identifier (UPI) will enable a holistic approach to identifying all trades and positions, including capital calculations, reporting, clearing mandates and booking rules. While such an idea sounds great in theory, historical attempts at achieving global agreement have fallen short, even within a subsector of the industry. Peter Meechan, Jim Bennett and Pauline Tykochinsky examine the feasibility of universal product codes, ponder whether the industry is ready to come together to create them, and discuss what a potential [...]
  • 727

    MARKIT METRICS: Q3 2013 trend analysis

    Since 2005, Sapient Global Markets and Markit have worked together to provide the G15 banks with global derivative transaction metrics for the over-the-counter (OTC) Derivatives Regulators’ Forum chaired by the Federal Reserve Bank of New York. The dealer group community utilizes this data to increase operational efficiency, along with verifying the ranking within the group and evaluating trading activity. The key metrics encompass OTC derivatives transaction volume and electronic processing of trade confirmations and measures the time delay in issuing trade confirmations. The industryís desire for self-regulation stated by the introduction of commitments to the OTC Derivatives Regulators Forum (ODRF) [...]
  • 717

    EVIDENCE-BASED MANAGEMENT: a practical management approach for the energy industry

    The rapid growth over the last five years of natural gas, gas liquids and crude oil activity in shale basins has single-handedly changed the global nature of energy production. The impact on companies in the upstream, midstream and downstream sectors is seen in increased competition for supply and markets as well as human and financial capital. Complicating ongoing business management is the large amount of data from sprawling assets that needs to be analyzed and acted upon in a narrow real-time window through a compelling format. In this article, Eric Scheller discusses the challenges and options facing business directors as [...]
  • 708

    INTEGRATING VOYAGE PARTNERS: straight-through processing in tanker and bulk commodity shipping

    While marine transport enables the lion’s share of global trading in bulk commodities today, the business-to-business (B2B) information integration across the value chain of a voyage has yet to evolve. As both the shipping industry and commodity merchants face tighter profitability, they need to look at a holistic approach to improve efficiency and data quality through information integration. In this article, Thomas Pappas, Jay Rajagopal and Rashed Haq discuss a way to harness emerging information services and technology platforms. Imagine air travel today without online booking and check-in, flight tracker applications and other web-enabled conveniences. This technology traces back to [...]
  • 668

    COMPREHENSIVE DATA INTELLIGENCE: empowering the energy marketplace

    Energy companies today face an unprecedented level of market flux and regulatory complexity. To make informed strategic decisions in such an environment, these companies need access to richer and more comprehensive market data than is currently available. In this article, Arun Karur explains how companies can improve trading decisions and better manage their portfolio risk and compliance requirements by utilizing actual and significant market data. In recent years, market understanding in the energy sector has been complicated by major global shifts in supply and demand, as well as increasing supply chain complexity and more stringent regulatory limitations and environmental protection [...]
  • 649

    AUTOMATED RETAIL DERIVATIVES PLATFORMS: challenges and opportunities

    The retail derivatives industry faces the same challenges seen in many mature financial markets: slow growth, heightening competition, increasing regulatory requirements and demanding clients. In this article, Stefan Naumann, Patric Mayer and Roger Waldhausen discuss how the automation of product platforms can help banks proactively maintain and expand their market share and highlight the different options to get there. During the last several years, the market for retail derivatives in central Europe has been in turmoil. In the early days, structured products, also known as certificates, were highly successful, sold well and provided high margins to the issuing banks. Because [...]
  • 635

    THE INVESTMENT RESEARCH MARKET: how regulations are driving technology innovation

    The post-crisis regulatory environment has had far-reaching effects—impacting processes in the front, middle and back offices. With two regulatory initiatives in the UK, the investment research market is now bracing for change. In this article, Neil Scarth, Principal, Frost Consulting, discusses how regulations are affecting research and, in particular, how they are driving technological change that will ultimately make the process of searching for and using information more efficient and productive. The institutional equity market, which involves the management of pension/mutual funds, etc., is a unique business model funded by the “currency” of equity commissions. These small charges are added [...]
  • 628

    THE CLIENT CLEARING OFFERING: balancing cost, risk and client service

    Financial institutions are facing pressure to offer clearing services to their clients. This is a costly endeavor that offers little financial upside for firms: It is a low-margin service that requires a large capital commitment to clearing houses as well as a heavy investment in technology. Phil Matricardi and Adam Kott discuss the costs and risks of offering client clearing as well as how firms may begin collaborating in the future to meet their clients’ needs. High-cost, high-touch banking and advisory services, such as over-the-counter (OTC) derivative brokerage, mergers and acquisitions advisory and fixed income capital markets, have been either [...]
  • 614

    THE INDUSTRIALIZATION OF CAPITAL MARKETS: where are we now?

    The notion of centralized infrastructure and services is not new. It has been used successfully in other industries for years. There is, however, a renewed interest in industrialization within the capital and commodity markets. Many firms are once again considering how utilities could help increase efficiencies, reduce costs and, ultimately, improve their return on equity (RoE). In this article, Ryan Baccus discusses the ways in which todayís industrialization efforts are putting market utilities back in the spotlight, when they make the most sense and what firms can expect in terms of benefits. Definition of Industrialization The process in which a [...]