Derivatives top agenda for ASX chief (from efinancialnews.com)


http://www.efinancialnews.com/story/2013-08-22/asx-results-june-2013?omref=email_TopStories

Derivatives top agenda for ASX chief

Michelle Price in Hong Kong

22 Aug 2013

The chief executive of the Australian Securities Exchange has said the company will focus on expanding its derivatives business over the next 12 months, as regulatory efforts to overhaul the global swaps market gather pace in Asia Pacific.

Derivatives top agenda for ASX chief

During the exchange’s annual results presentation this morning, ASX managing director and chief executive Elmer Funke Kupper said derivatives is “the business where the vast majority of our energy is going in 2014”. The exchange is looking to exploit new rules that will see over-the-counter trades pushed onto exchanges and through clearing houses.

Funke Kupper added: “In 2014 we will be focusing on the implications of the international regulations…International regulations create new business opportunities and they affect our clients as regulators demand that some products that are presently traded OTC are cleared. We are investing in new services that we are bringing to market to help our clients.”

His comments came as the ASX reported net profits of A$348 million ($313 million) for the 12 months to June 30, up 3% on the year-ago period. Revenues came in at A$617 million, up 1.1% on the preceding period.

The first six months of the year acted as a drag on ASX’s full-year performance as subdued trading activity and increased competition in the cash equities market resulted in lower fees from trading and information services. Revenues across both businesses fell 8% for the 12 months to June 30 on the year-ago period.

 

These declines were offset by a strong performance in ASX’s listings, technical services, and the derivatives franchises, revenues for which grew 5%, 10% and 5% respectively in the 12 months to the end of June, compared with the previous year.

The ASX is one of several bourses in the Asia-Pacific region ̶ including the Japan Exchange Group and the Singapore Exchange ̶ making a play for the region’s $42.6 trillion OTC derivatives market. The company has been building out its OTC clearing house and in July it completed a A$553 million capital-raise that will bring ASX Clear in line with international standards on capital levels at OTC clearing houses.

Funke Kupper described the capital raise as the “most important” development for ASX during the past 12 months and added that the ASX’s new interest rate swap clearing service would begin to clear its first interdealer swaps in coming weeks. The launch of client clearing will take place during the latter half of the year.

The exchange expanded its listed futures business with the launch of new electricity futures contracts in May and is set to launch new volatility futures contracts based on the VIX index, also known as the “fear” index, in October. It is also expanding into collateral services to help meet growing client demand for liquid assets.

 

–write to michelle.price@dowjones.com and follow on Twitter @michelleprice36

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Aquis Exchange To Offer Access Via BT Radianz Cloud


Aquis Exchange To Offer Access Via BT Radianz Cloud

http://www.mondovisione.com/media-and-resources/news/aquis-exchange-to-offer-access-via-bt-radianz-cloud/

Date 29/07/2013
BT given preferred supplier status
Aquis Exchange Members will benefit from subscription pricing
Allows quick and cost-effective access to Aquis Exchange
Enables straight through processing
Aquis Exchange Limited, the proposed pan-European stock exchange*, today announced a new agreement with BT that allows its Members to access its trading platform via the BT Radianz Cloud.
The BT Radianz Cloud — the largest secure networked financial community in the world — helps financial market participants globally to exchange market information, trade with each other and clear and settle transactions.
Under the new agreement, BT will not only be Aquis Exchange’s preferred cloud connectivity supplier, but the Exchange’s services will now be accessible to the thousands of members of the BT Radianz Cloud community globally.
In addition, Aquis Exchange Members can use the BT Radianz infrastructure to connect with Aquis Exchange’s clearing partners using one resilient access point. This allows the full trade cycle to be conducted seamlessly and helps institutions achieve straight through processing (STP).
Commenting on the agreement, Alasdair Haynes, CEO of Aquis Exchange said:
“The opening of our doors to the BT Radianz Cloud community to access Aquis Exchange is important for us. It provides us with an opportunity to gain rapid access to an unrivalled community of market participants, which is why we have selected them as our preferred cloud connectivity supplier. We believe in having the widest possible range of users to strengthen the ecology of our marketplace and extend the benefits of our subscription pricing model to all professional investors.”
Robin Farnan, Managing Director, Financial Technology Services, BT, said:
“We are delighted to have been selected as Aquis Exchange’s preferred cloud connectivity provider. Aquis Exchange now joins over 100 trading venues that are already part of the BT Radianz Cloud community and benefits from reduced time-to-market and cost of technology infrastructure. The availability of Aquis Exchange to the BT Radianz Cloud community is a great example of how technology can accelerate innovation and efficiencies in the financial sector.”
Aquis Exchange’s subscription pricing works on a similar model to that of the telecoms industry and is designed to encourage participation from all categories of professional trading firm. Users will be charged according to the message traffic they generate, rather than a percentage of the value of each stock that they trade. There will be different pricing bands to accommodate varying degrees of usage. There will be a very low usage band for small firms, that are traditionally disadvantaged by the pricing structure of the incumbent exchanges and, at the other end of the pricing structure, will be the top category where usage is unlimited (subject to a fair usage policy).
For Aquis Exchange Members that are not part of the BT Radianz Cloud, access is available in a number of other ways, including via direct line connection or co-location into Equinix’ LD4 data centre in Slough (Berkshire, UK)

SGX launches ‘Born to Trade’ initiative


SGX launches ‘Born to Trade’ initiative

http://www.automatedtrader.net/news/at/143926/sgx-launches-born-to-trade-initiative

Singapore Exchange ‘Born to Trade’ initiative aims to attract new derivatives traders to the market

Singapore – Singapore Exchange has lauched its “Born to Trade” initiative. Intended to support the futures trading profession and expand its community, the initiative also highlights the contributions of former and current traders towards the development of the Singapore derivatives market.

Singapore’s entry into global futures trading began in 1984 when the former Singapore International Monetary Exchange (SIMEX) introduced products such as the Nikkei 225 Index Futures and the MSCI Taiwan Index Futures. In the same year, SIMEX launched exchange linkages, known as the Mutual Offset System to-date, with Chicago Mercantile Exchange. SIMEX merged with the Stock Exchange of Singapore in 1999 to form SGX.

“The SIMEX open outcry was like our second home. Many exciting trading deals were made and global partnerships were forged. We now welcome more to join the community and contribute towards the future of derivatives trading in Singapore,” said Mr Ng Tee How, President, AFACT.

“Singapore’s trading floor was the anchor leg of the “follow-the-sun” market in global US Dollars, alongside London and Chicago. SIMEX was the poster child of the intensely competitive derivatives marketplace globally, and its legacy is fondly nurtured and supported by the international fraternity of futures and options traders. SGX is keen to support Association of Financial & Commodity Traders’ (AFACT) efforts in nurturing the art, craft and tradition of professional trading. This pioneering Singaporean legacy of the entrepreneurial risk-taker shines a mirror to Singapore’s own history as successful entrepot – a unique narrative for a community born to trade,” said Mr Michael Syn, Head of Derivatives, SGX.

The “Born to Trade” initiative is part of SGX’s commitment to attract new derivatives traders to the market. The initiative includes several features such a new microsite (www.sgx.com/borntotrade) for trading professionals and potential traders to interact and exchange trading stories. The public is able to learn more of the contributions of former SIMEX traders in the early days through personal testimonies. Market participants and the public are also invited to share their trading experiences and any trading stories at #borntotrade on Twitter and Instagram. Individuals who are interested in building the knowledge and skills for a trading career can also visit the SGX Academy at http://www.sgx.com/academy.

Markit launches new front office IRM analytics solution


Markit launches new front office analytics solution

http://www.automatedtrader.net/news/at/143901/markit-launches-new-front-office-analytics-solution

Markit Integrated Resource Management solution to enable dynamic management of balance sheet resources and optimise trading decisions

London and New York – Markit, the financial information services company, has enhanced its front office analytics solution to enable financial institutions to calculate the costs of funding and capital resources of their over-the-counter (OTC) derivatives trades in a single application.

At a time of regulatory change and when the cost of funding and capital is rising, the new Integrated Resource Management (IRM) solution will enable customers to dynamically manage their balance sheet resources and optimise trading decisions prior to execution. IRM has been installed at a customer site, with implementation at other financial institutions under way.

Under the Dodd-Frank Act, the European Market Infrastructure Regulation (Emir) and Basel III regulations, uncleared OTC derivatives will incur Credit Valuation Adjustment (CVA) risk capital charges, default risk capital charges and minimum initial margins. Meanwhile, market participants trading centrally cleared derivatives will be subject to capital charges for default fund contributions and central counterparty trade exposures and will also be required to fund initial margin.

Paul Jones, director, Markit Analytics, said: “The economics of OTC derivatives are changing. There are numerous capital and funding costs that now need to be considered before executing a trade. By bringing our established CVA, risk weighted assets and initial margin solutions together, our customers can run interactive scenarios with ease to understand the tradeoffs between these components. This was made possible by the speed of the Markit Analytics engine and is the first of its kind.”

Financial institutions will use Markit’s solution to price novation packages and renegotiate credit support annexes (CSA), helping them decide whether to move existing OTC derivative trades onto new Isda CSAs. Financial institutions will also be able to use IRM to replicate initial and variation margin calls under various stress scenarios.

Bank Of Queensland (BOQ) chooses SuperDerivatives front office solution


BOQ chooses SuperDerivatives front office solution

http://www.automatedtrader.net/news/at/143823/boq-chooses-superderivatives-front-office-solution

Singapore – Bank of Queensland has chosen a front office solution from SuperDerivatives to provide BOQ with advanced pricing capabilities and risk management tools. The solution includes the cloud-based DGX market data platform.

SuperDerivatives’ distribution solution will provide independent price discovery, pre and post-trade deal management tools and real-time market data. Additionally, it will provide access to advanced analytics and coverage for cash and derivatives products across multiple asset classes.

David Hillhouse, BOQ’s Head of Financial Markets said: “The SuperDerivatives distribution solution has proven valuable for our sales and trading desks, allowing them to quickly get a comprehensive view of multi-asset portfolios, and identifying hedging and structuring opportunities for our clients. Bank of Queensland chooses SuperDerivatives Having the right tools at the right price allows our team greater efficiency and, most importantly, allows us to give better service to our clients.”

Noam Shefi, Regional Sales Manager at SuperDerivatives added: “We are proud to help BOQ enhance its new Financial Markets offering. Our solution will help them to increase their efficiency and improve client servicing, whilst keeping costs under control – key elements to success in Australia’s competitive financial markets. We look forward to working with BOQ as they grow and succeed in the future.”

 

Riyad Bank chooses Calypso for front-to-back-office support


Riyad Bank chooses Calypso for front-to-back-office support

http://www.automatedtrader.net/news/at/143821/riyad-bank-chooses-calypso-for-front_to_back_office-support

London – Calypso Technology has been selected by Saudi Arabia based Riyad Bank to provide treasury operations and structured product front-to-back-office support. The Calypso system will be rolled out cross-asset in the bank’s operations to support structured products and hedge accounting.

Riyad Bank, looking to update front-to-back-office systems and operations, will change from a process based operating model to a more efficient exception-based one, significantly improving its straight-through-processing (STP) rate. Additionally, the bank will align its treasury operations with international and Islamic financial industry standards. Calypso will support the cross-asset requirements of the bank’s business covering its FX (cash and derivatives), money market, interest rate derivatives, fixed income and commodities (including precious metals and derivatives) operations.

Riyad Al-Zahrani, EVP Operations at Riyad Bank, said, “It was important for us to select a vendor that would deliver industry best practices, front-to-back-office support for structured products and cross-asset capabilities as well as the Shariah-compliant support that is critical for our market and for growing the business regionally. We went through a robust selection process during which Calypso outperformed other solutions in areas of functionality, flexibility and technology.”

Charles Marston, Chairman and CEO of Calypso, states, “We look forward to working with Riyad Bank, a key Saudi Arabian financial institution and market leader. Calypso remains committed to servicing the Middle East and Saudi Arabia in particular, a principal centre in Shariah finance. The region is of increasing importance in global finance and we are pleased to be a part of this dynamic and vibrant marketplace.”

FIA & FOA MERGER ON THE CARDS ???


http://www.thetradenews.com/news/Asset_Classes/Derivatives/Cross-border_issues_prompt_derivatives_association_merger.aspx.

Javelin OTC Derivatives Establishes Presence in Telx’s Chicago Data Center


Javelin OTC Derivatives Establishes Presence in Telx’s Chicago Data Center

http://low-latency.com/article/javelin-otc-derivatives-establishes-presence-telxs-chicago-data-center/?utm_source=weekly&utm_medium=email&utm_campaign=ll_13-06-20

Telx, a leading provider of global interconnectivity, cloud enablement services and datacenter solutions, today announced at SIFMA Tech 2013 that Javelin Capital Markets, an OTC derivatives execution platform, has leveraged Telx’s network & interconnection rich Cloud Connection Center, “CHI1” at 350 East Cermak Road, Chicago, Illinois, providing Javelin with access to Telx’s extensive Financial Services community. As a colocation and interconnection client in Telx’s strategically located data center in downtown Chicago, Javelin can now offer Telx’s financial community high-performance connectivity to derivatives execution platforms for Interest Rate Swaps and Credit Default Swaps. Javelin offers both anonymous electronic and voice-hybrid methodologies for trade execution.

Newly formed Swaps Execution Facilities (SEFs), that have emerged as aspects of Dodd-Frank become implemented, are incorporating their services in secure data center environments. Low-latency connectivity is a critical component for the OTC Derivatives market linking SEFs and Central Counterparty Clearing (CCPs). With CCPs being located in Chicago, the proximity of Telx’s CHI1 facility at 350 East Cermak provides financial customers with high-performance and flexible connectivity to Javelin as well as to other SEF engines from a single location.

“As aspects of Dodd-Frank become cemented in the financial community, the need to establish SEFs in secure environments is a crucial step for our eventual classification as a Swap Exchange Facility,” said Michael Black, MD of Infrastructure of Javelin. “Telx’s ability to provide us with access in their premier Chicago facility, and their proximity to the clearing venues, swaps execution facilities, and buy-side participants put us in a strong market-leading position to service current and future clients.”

“We are excited to have Javelin join the expanding Telx financial ecosystem in our CHI1 facility. Javelin’s secure exchange platform with a state of the art user interface is well positioned in the rapidly changing OTC Derivatives market,” said Shawn Kaplan, general manager of Financial Services for Telx. “In recent months we have seen an increasing number of trading systems turn to Telx and our CHI1 facility, most recently with the announcement of Sky Road joining Telx’s financial community. Javelin and other industry leading financial institutions at 350 East Cermak benefit by connecting with other financial institutions in the facility, which allows them to offer their full suite of services with flexible connectivity to current and future clients.”

Telx’s CHI1 facility, located in the South Loop of the Chicago Central Business District, provides customers with the financial eco-system at 350 Cermak, one of the leading financial eco-systems in the world. As the operators of the “Meet-Me-Room,” and one of the largest colocation providers at the CHI1 facility at 350 Cermak, Telx provides industry leading data center and connectivity services for the global financial community.

Attendees at SIFMA Tech 2013 in New York City can register to attend Telx’s grand opening event of its new flagship data center, NJR3 in Clifton, New Jersey on June 19, 2013 from 3:00 p.m. to 7:00 p.m. Round-trip transportation will be provided by Telx for all registered guests. The event will feature a keynote address by NFL Legend Phil Simms, along with public remarks Clifton Mayor James Anzaldi, State Senator Nia Gill, and Telx’s Executive Vice President of Engineering and Construction Michael Terlizzi. Cocktails and refreshments will be served, and tours of the new data center will be given.

 

Moscow Exchange seeks to ramp up derivatives offering


Moscow Exchange seeks to ramp up derivatives offering

http://www.efinancialnews.com/story/2013-06-20/moscow-exchange-seeks-to-ramp-up-derivatives-offering?omref=email_TradingTechnology

The Moscow Exchange will add futures based on popular German stocks to its market, as part of its plans to further develop a derivatives offering for both retail and institutional investors.

Moscow Exchange seeks to ramp up derivatives offering

The Moscow Exchange has partnered with Deutsche Börse-owned derivatives market Eurex to offer futures based on the stocks of Deutsche Bank, Siemens, BMW, Volkswagen and Daimler from September.

Speaking to Financial News, Roman Sulzhyk, head of futures and options market at Moscow Exchange, said: “These new futures will offer Russian retail investors with new products to invest in and are the first step in our cooperation with Deutsche Börse. We plan to look at the portfolio of products offered by both exchanges to see where we can further extend our partnership.”

Deutsche Börse signed a letter of intent with Moscow Exchange in November 2012, which established a strategic partnership between the two bourses. The exchanges have previously said they will look to cooperate on infrastructure, product development, regulations and post trade services.

The new derivatives are short-dated products that Sulzhyk said would allow retail investors to take short-term bets on the future stock price of the five German stocks. He added that Eurex and Moscow Exchange deliberately started with products that would not lead to a shift of liquidity from Germany to Russia.

 

Sulzhyk also said the Moscow Exchange was actively working with regulators to help encourage the use of derivatives among institutional investors.

“We are working hard to make it easier for large Russian funds to trade derivatives. There aren’t many Russian funds with derivatives in their portfolio because of unclear regulation. Institutional investors want access to liquid, longer-dated derivatives that will help them to hedge against portfolio risk,” he said.

The Russian exchange already lists futures based on the main indices of Brazil, India, Hong Kong and South Africa as part of an initiative known as the Brics Exchange Alliance that was launched last June.

The Moscow Exchange was formed in December 2011 from a merger of Russia’s two main domestic exchanges RTS and Micex as part of the Russian government’s plan to transform Moscow into an international financial centre. Since the deal was completed, the exchange has taken steps to encourage overseas firms to trade on its market, including major changes to post trade processes.

 

— write to anish.puaar@dowjones.com and follow on Twitter @anishpuaar

 

Prism Valuation Enhances Lat-Am Derivative Valuation Service


Prism Valuation Enhances Lat-Am Derivative Valuation Service

http://www.bobsguide.com/guide/news/2013/Jun/17/prism-valuation-enhances-lat-am-derivative-valuation-service.html

Prism Valuation has recently introduced two enhancements to its Derivative Valuation Service for Lat-Am products. Firstly, it now offers its clients the choice of discounting valuations for Brazilian Real (BRL) CDI zero coupon swaps using a curve constructed from USD/BRL non-deliverable forwards and swaps. This is in addition to the already existing option of allowing forecasting of the forward CDI rates using either an on-shore or an off-shore curve.

The non-deliverable curve discounting option is now being delivered to several clients trading these instruments. In addition, Prism has recently added support for the valuation of Colombian Peso (COP) OIS swaps, which can also be discounted using deliverable or non-deliverable curves. In addition to BRL and COP, Prism currently delivers IRS and other derivative valuations for Chilean Peso (CLP), Mexican Peso (MXN) and Peruvian Nuevo Sol (PEN) in the Lat-Am region.

“Supporting non-deliverable discounting for BRL and other Lat-Am and Asian interest rate swap types reflects Prism’s continuing commitment to providing a flexible, robust framework to meet clients’ derivative valuation requirements. We are always willing to make the effort to broaden our coverage and utilize emerging methodologies in order to deliver the best possible service” comments Keldon Drudge, CEO.

 

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