Nex Group is aiming to kick-start the practice of pricing in the cost of funding initial margin on non-cleared derivatives trades with the launch of a margin valuation adjustment (MVA) calculator for dealers and buy-side firms.
NEX has taken on some of the identity of modern exchanges, which do many things besides count pennies for every trade and cleared contract. So, can they become the Amazon of the financial markets? Spencer would say unequivocally, yes.
Offshore trading in ringgit non-deliverable forwards on EBS BrokerTec’s electronic platform has dropped by about 70 percent since policy makers took steps in November to deter foreign banks from trading the contracts. Jeff Ward provides some context, "“From what I’ve heard from participants, it’s probably made it harder for some offshore investors in Malaysian debt to hedge their risk..."
"Regulators have had pretty good surveillance tools for MiFID I and, using cloud computing, they will be better for MiFID II. In the next five years this kind of surveillance will become the norm. They will change the face of regulation and make it harder to hide. It will expose shortcomings within firms' monitoring and controls," said Collin Coleman, chief executive at Abide Financial.
Ben Pott, Head of Government Affairst at Nex Group, "With Giancarlo questioning whether the banking rules are the right ones for the US, that kind of clouds the international consensus around banking rules and the question is how will they proceed"
Fintech vendors (like triBalance Quantile, LMRKTS and Capitalab) are competing to reduce the amount of initial margin (IM) dealers must post on non-cleared derivatives trades; though banks caution that some solutions being tabled may prove too complex or costly to merit the investment, and that there is likely room for only one or two to survive.