Posts Tagged: SunGard

Lewis on Lending: A Bubble Fit to Burst?

Posted by & filed under Capital Markets, Risk & Reg Reform, Securities Finance, Technology.

This blog post was taken from the Astec Analytics Securities Lending Focus for April 2013.

In the early 18th century, the bursting of what became known as the South Sea Bubble broke many fortunes. The East India Company, riding high on the global dominance of the British Empire, issued huge quantities of highly priced stock to hungry investors who believed the company’s monopoly on South American trade could not fail.

Unfortunately, they were wrong, and their clamor for the shares blinded them to the fundamental weaknesses of the company. A sudden realization burst the bubble, and the shares became worthless almost overnight. I am not, of course, directly comparing certain countries’ debt issuance with that of incompetent 18th century industrialists, but there is a certain similarity in the desperation of investors seeking safe places to put their money and the resultant bubbles in prices such actions create.

Beware the Ides of March: A Warning about Central Clearing from 44 BC

Posted by & filed under Capital Markets, Risk, Risk & Reg Reform, Transparency.

This blog post was originally published by DerivSource.

In March of 44 BC, Gaius Julius Caesar was killed on the steps of the Forum of Rome – before his ambition to centralize power in the Republic, removing the checks and balances of Roman politics, could be fully realized. It is striking that the date for mandatory clearing is set for mid-March 2013, and there are clear parallels to March 15, 44 BC, better known as the Ides of March.

Brazilian Capital Markets: Evolution Demands Automated Compliance Solutions

Posted by & filed under Capital Markets, Compliance, Global Markets, Risk & Reg Reform.

A version of this blog post was originally published by Brasil Econômico.

The Brazilian capital markets are continuing their exciting evolution into a high-liquidity, low-entry trading and investment space.

To date, Brazil’s BM&FBOVESPA has not shared its in-house clearing services with rivals, preventing the emergence of a competitive exchange landscape similar to what we see in the U.S. and Europe. In addition, buying equities is still a novelty for most individual investors in the country.

With trading largely focused on large-cap companies and executed by institutional traders, the emphasis on active, automated and near real-time market abuse and insider trading detection is just emerging on the Brazilian scene.

Intraday Securities Lending Data: Too Hot to Miss [Part 2]

Posted by & filed under Capital Markets, Efficiency, Securities Finance.

This blog post was originally published by TabbFORUM.

In a two-part story, we examine the past and present of securities lending data. In part two, we discuss current examples coming from Europe.

In the second in our series analyzing the benefits of intraday securities lending data, we will be focusing not on what has happened already or what could happen in the future, but what is happening right now. We will be looking at companies that are seeing some of the highest borrowing rates and utilization levels in the markets today. These are companies where daily rate changes can be hundreds of basis points, where knowing what is happening, as it happens, translates into real money gained or lost. This is a look at what is just too hot to miss.

Why the EU’s Rejection of EMIR is an Explicit Endorsement of Dodd-Frank

Posted by & filed under Capital Markets, Risk & Reg Reform, Transparency.

This blog post was originally published on FOW.

The EU rejection of EMIR on February 5, 2013 is specifically directed at non-financial companies, such as airlines, agriculture firms and other corporates that use derivatives to hedge against commercial activities. The ruling likely provides much-deserved relief to non-financial hedgers by modifying, reducing or potentially eliminating a threshold-based clearing obligation.

Is Collateral Scarcity an Opportunity in Disguise?

Posted by & filed under Capital Markets, Derivatives, Efficiency, Regulations, Risk & Reg Reform, Solutions: Collateral Mgmt.

This blog post was originally published on TabbFORUM.

Collateral as a means of endorsing a promise is as old as human interaction itself. Collateral is even prescribed in the Bible as an ordinary business practice. In fact, a relevant verse of the Book of Exodus reads, “If you take your neighbor’s cloak as security for a loan, you must return it before sunset.”

Similarly to biblical times, almost all modern pledge practices require some form of collateral to enforce a promise.

This blog post was originally published on TabbFORUM.

Collateral as a means of endorsing a promise is as old as human interaction itself. Collateral is even prescribed in the Bible as an ordinary business practice. In fact, a relevant verse of the Book of Exodus reads, “If you take your neighbor’s cloak as security for a loan, you must return it before sunset.”

Similarly to biblical times, almost all modern pledge practices require some form of collateral to enforce a promise. Unlike in biblical times, today collateral can be managed through interconnected repositories and facilitate real-time collateral management across products, counterparties, and regulatory requirements. This process is known as collateral optimization.

Cage Goes in the Water. You Go in the Water. Shark’s in the Water.

Posted by & filed under Capital Markets, Risk, Risk & Reg Reform, Risk Management, Solutions: Risk & Analytics, Technology, Transparency.

This blog post originally appeared on TabbFORUM. In the 1975 summer smash Jaws, a rogue shark terrorizes a summer town. In addition to being responsible for more aquaphobia and galeophobia (the fear of sharks) than any other film in history, it does highlight different responses to a problem. Much of the film is set on [...]

Only the Beginning for Exchange and Clearing Innovation

Posted by & filed under Capital Markets, Derivatives, Exchanges, Global Markets, Global Trading, Post-Trade, Regulations, Risk & Reg Reform, Solutions: Collateral Mgmt.

As global regulators move to implement new rules designed to control the swaps markets, the world’s futures exchanges are responding with bold and innovative structural changes intended to reduce or eliminate certain regulatory burdens faced by their customers, including increased trading costs and additional expenditures associated with alternative risk management processing methods.

ASEAN: New Trading Opportunities, New Post-Trade Demands

Posted by & filed under Capital Markets, Exchanges, Global Markets, Networks, Post-Trade, Solutions: Post-Trade, Technology.

The ASEAN trading link announced its launch in September 2012. The link will firmly establish the ASEAN nations as an investment and trading bloc, and is also expected to attract new foreign investment to the region, as well as provide better opportunities for local capital.

Local Asian brokerage firms will probably benefit most from the link. They are now in a better position to compete with major international brokerage houses to manage the inflow business coming from neighboring countries, and they will also now have outbound access to local exchanges. While international brokerages have already established their own networks and unilateral relationships at the individual exchanges, the ASEAN trading link will bring the local brokers up to speed.