Guest Contributor: Tony Scianna, deputy head of strategy, SunGard’s capital markets business
In recent years, we have seen many developments in getting the industry to light speed in the front office, but now the focus appears to be shifting to real-time data management and post-trade processing applications, especially in the OTC derivatives space. As the CCP landscape continues to evolve in the midst of unprecedented regulatory reform around the globe, firms now face the daunting task of adapting their post-trade processes to meet their current requirements and to prepare for the future.
While finalizing new rules for regulatory reform may be taking longer than anticipated, the impact of these changes is already being felt everywhere, from the movement of OTC derivatives transactions to central clearing to the myriad new reporting requirements that have begun to crop up globally. Even though we don’t know what the exact rules will be, firms participating in the OTC derivatives markets do know the general reasons behind the rules – increasing transparency and reducing systemic risk. And achieving this requires a focus on and investment in the back office.
At this point, firms have a choice: deal with the one-off regulatory requirements as they are announced or equip themselves with an enterprise-wide approach to tackling current and future rules. Of course, the choice should be clear; investing in flexible, enterprise-wide back-office capabilities today will allow firms to better adapt to any new regulatory demands on the horizon.
As firms consider this, they must determine how they will actually capture data from disparate applications, cross-reference and standardize that data, and then store it in an environment that is available on demand 24 hours a day, seven days a week. When it comes to post-trade processes, firms should ask: how can we report on any or all transactions globally across the enterprise in as close to real time as possible? Answering this question is the root to dealing with any new requests from a regulator, auditor, CEO or risk manager.
With many more changes to face in the months and years to come, this will allow firms to meet whatever new challenges the industry requires.
To learn more on OTC Derivatives Operations, check out our upcoming 4th Annual OTC & Exchange Traded Derivatives conference on May 7th in Chicago.