Post-Trade Forum

The Post Trade Forum's aim is to propagate debate and discussion between senior practitioners in Post Trade Operations in the global securities market; to bring about increased awareness and knowledge across both buy-side and sell-side financial institutions in financial products and be a focal point for firms and practitioners to air views.

Gary Wright Analyst at BISS Research

Collateral liquidity

The markets are struggling today with collateral management as never before. The fragmentation of market infrastructures, volatility in markets, increased margining requirements and counterparty risk requirements are all sucking in quality collateral, leaving the dregs to be shared throughout the market, leaving financial services firms to either ...

15 May 2012

Retired Member 

Initial Margin: Theory and Practice

The news that the CME CCP will be accepting corporate bonds and that LCH-Clearnet will accept RMBS for initial margin has me thinking about the dangers of demutualisation of clearing houses. Managements of shareholder owned clearing houses are keen to compete for market share and volume to increase revenues, bonuses and profits (not necessarily ...

14 May 2012

Gary Wright Analyst at BISS Research

Payment convergence

T+2 is due in 2015 in Europe, and the USA are already investigating T+1, so it looks inevitable that shortening the settlement cycle is well and truly on the development map. Regular readers will know my views on this so I won’t go over already trodden ground, but the operational issues to achieve T+ whatever has to be addressed and a ...

14 May 2012

Retired Member 

Are CCPs Increasing Risks? Part IV - With Slides!

The Post Trade Forum debate on Are CCPs Increasing Risk? was held at the London Stock Exchange [a couple weeks ago]. Cheers, Gary, for letting me take part in such a fun event! My slides are available to download here: Are CCPs Increasing Risk? Short story is that I see rising risks from mandatory margin of OTC derivatives with CCP fragmentat...

13 May 2012 /regulation

Gary Wright Analyst at BISS Research

The business benefit of T2S

Ah! I can hear you all crying that title as T2S draws ever closer and it creeps on to the development agenda. What is the business benefit? For once it’s not a regulatory driven change (Although it’s certainly political) so why should firms in the market get excited? Excited is probably the wrong word as it is more about plumbing than rockets to ...

11 May 2012

Gary Wright Analyst at BISS Research

Who's on first, What's on second Identity Standards

Like the old Abbott and Costello routine, [when Lou Costello is considering becoming a ballplayer and Bud Abbott wants to make sure he knows what he's getting into] there can be huge confusion and mishaps if there is ambiguity in the identity of who’s involved in a transaction. For those that may not be familiar with this running gag, the (slightl...

08 May 2012

Gary Wright Analyst at BISS Research

The Future of European Clearing and Settlement

The pace of change in European financial markets is enormously fast if measured against a barometer of historical change. As we all know laws and regulations as a result of political agendas is the power that is driving most of the change but there are also market forces at work, which are creating a new structure for clearing and settlement in Eu...

04 May 2012

Gary Wright Analyst at BISS Research

Risks in shortening the settlement cycle

Years ago when the UK markets moved from T+5 to T+3 there was plenty of research about the benefits gained in risk reduction. There was doubt about the actual risk benefits because although there was obviously a reduction in possible default risk and market risks, there was a considerable increase in settlement failures and all the risks a...

01 May 2012 /regulation

Gary Wright Analyst at BISS Research

Data challenge for T plus 2

Any shortening of the settlement cycle is clearly going to tax operations to complete all the tasks necessary to settle only two days after trade date. I remember being head of operations when the move from account settlement went to ten day rolling then five day and then the three we have today. Each change came with its own problems with technol...

25 April 2012

Gary Wright Analyst at BISS Research

The madness of taking liquidity out of the market

As the world struggles for economic growth there is a weird onus on restructuring the markets and wrapping massive amounts of legislation and regulation around managing risks. It’s a knee jerk reaction from politicians desperate to show voters that they are doing something to stop any reoccurrence of the financial disasters first seen in 2007. It’...

24 April 2012