by GUY WHITLEY, KIRSTEN HALL, MATT NIVEN, KATE AMORY, GEORGI DANOV, DAVID OSBORNE, SAMANTHA ALESSANDRO AND GURLYNN KHARA

Jan 9, 2015

2014 was another year of unprecedented change, and 2015 is shaping up to be the same. We look back at some of the areas of focus for the OTC Derivatives and Securities Industry in 2014, and the areas we believe will dominate 2015.

For the OTC Derivatives and Securities Industry, Regulatory compliance dominated 2014. With the implementation of EMIR Trade Reporting in February for all Derivative transactions in Europe, followed by the August deadline for the reporting of daily collateral and valuations, institutions continued to invest time and money in Change Management across the entire front-to-back infrastructure. The move to the shortened T+2 settlement period for European Securities; matching and pairing of Derivative transactions; daily reconciliation of portfolios; adapting their people, process and technology; and processing settlements closer to trade date were critical requirements.

The Remediation exercises that occurred in client outreach, client reference data, reporting and reconciliation continued as institutions worked through pre and post-regulatory milestones.  The focus on generating new Legal documents both transactional and contractual due to clearing regulations, protocols and new product definitions was a challenge. Equally, the focus on efficiently and accurately extracting the terms from old legal documents and making them available to multiple consumers became a priority.

Finally, the increased need for effective investment decision making, compliance monitoring, and real/near time risk, financial and capital/collateral management has brought data Analytics and data management to  the forefront of institutions’ agendas.

So what will dominate 2015? Table 1.0 summarises the key areas of focus across Regulation, Change Management, Remediation, Legal and Analytics. These, coupled with the continued cost pressures institutions face, will drive greater collaboration and use of new, and industrialisation of existing, industry shared services. Now is not the time to go it alone.

2014-2015 followup