OTC Derivatives are here to stay: FINCAD’s annual survey

Dublin and Vancouver, BC - 11 June 2013

Regulation continues to prove challenging for the sell-side, buy-side focuses on accurate risk measurement

FINCAD will be hosting a webinar on June 27th, 2013 to announce the results of its annual survey. The survey reveals that, despite concern over regulations and increasing costs, the overwhelming majority of respondents are continuing to deal in OTC derivatives. Of the more than 1,000 people who participated in the survey, 96% of buy-side respondents, over 80% of sell-side respondents and 87% of corporates expect their OTC derivatives usage to increase or stay the same in the coming year.

Ranking higher than last year, regulatory compliance was seen as the single biggest challenge with respect to derivatives for the sell-side sector (23%), followed closely by independent pricing and valuation (20%). Regulatory changes (Dodd-Frank, EMIR, Basel III) continue to have a moderate to major impact on the majority of sell-side respondents, with only a small percentage indicating that they have already made all the necessary changes. On the buy-side, regulations are having less of an impact than in 2012, potentially indicating that respondents have already made the required changes to systems and processes. However, more than half still feel that regulations are having a moderate to major impact.“The survey results indicate that, although regulatory uncertainty and market changes still pose significant challenges, we can expect a continuing interest and investment in OTC derivatives and the systems that support them,” says Bob Park, President and CEO, FINCAD. “More than ever, we’re also seeing a willingness to increase IT spending, as firms recognize a growing need to address risk and tackle regulatory compliance. There has definitely been a paradigm shift post the 2008 crisis, placing greater awareness and importance on addressing and understanding risk across the enterprise, and the ability to measure it in real time.”

Join FINCAD’s live webinar on June 27th to explore the results in depth and gain insight into the issues affecting the buy and sell-side. All attendees will receive a complimentary copy of the full report following the webinar.

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