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derivatives reform

Capital markets structure, particularly with regard to the OTC derivatives market has undergone major change in the last decade.

These changes arise from the G20 policy response to the global financial crisis.

The regulatory reform agenda has impacted most aspect of the derivatives market: the capital regime, regulations around trading, clearing and reporting.

The scale and magnitude of the changes has required the wholesale redesign of business models. 

Over the last dozen years I have been involved in a series of projects closely connected to the derivatives reform legislation - EMIR and MiFID and MiFIR in Europe and Dodd Frank in the US.

These reforms were intended to bring more transparency to the OTC derivatives market and seek to force that market to operate akin to the listed, exchange traded derivatives markets.

The core principles of the legislation being to increase the penetration of, and transparency associated with, electronic trading, to push more of the derivatives into the cleared environment and for increased data transparency.

Over the last decade I have been initimately involved in a series of high profile programmes involving critical market infrastructure and regulatory reform.

I have participated in the design and build of new markets, venues and CCPs. I have deep knowledge of all functions of a clearing house:

  • Membership requirements
  • Account structures and the collateral model
  • Risk management model, including margin methodologies, default fund waterfall, payment models and CCP liquidity
  • Trade reporting obligations
  • CCP organisational design, including Board and Risk Committees
  • Definition of commercial model

I have been involved in detailed engagement with clearing members, regulators and central banks across Europe.

Outside the world of the CCPs, I have an excellent network within the broader market infrastructure arena. I understand the exchange industry and the world of IDBs; both of which have undergone profound change.

I have many buyside relationships and have assistedmarket participants to re-engineer their derivatives businesses to reflect changes to the regulatory model.

The last few years have brought profound change to all participants in market infrastructure; exchanges, CCPs, IDBs, clearing members, service providers and, of course, end users.