Managing change with OTC derivatives reforms
Following the financial crisis, the leaders of the Group of Twenty (G20) nations agreed to a series of measures to increase the transparency of the over-the-counter (OTC) derivatives market and to reduce systemic risk. These reforms bring sweeping changes for all financial institutions.
They fundamentally alter the structure of the OTC derivatives markets, significantly impacting the business models, profitability, legal entity structures, operations, data and technology of financial institutions’ derivatives businesses.
Global regulatory reform initiatives are underway to implement these measures – e.g., the US Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), the Markets in Financial Instruments Directive/Regulation (MiFID II/ MiFIR) and the European Market Infrastructure Regulation (EMIR).
The uncertain and evolving regulatory timelines are challenging firms to strategically prioritize imminent market developments and rulemaking against the longer-term, global regulatory change process and related jurisdictional challenges.
By proactively responding to the new business environment and effectively structuring their OTC derivatives business, institutions can take advantage of opportunities, protect franchise value, and avoid the potential downside impacts of these changes.
For more information on OTC derivatives and capital markets reform, and the issues and actions that need to be addressed, please read our materials below.
Proposed requirements from the Basel Committee and IOSCO are part of broader reform initiated by the G20 to reduce systemic risk posed by OTC derivatives.
Markets in Financial Instruments Directives (MiFID II) will affect anyone dealing and processing financial instruments across Europe. Our summary explores key considerations and opportunities.
Read about the key requirements of the proposed AIFMD’s depositary reforms on the European alternative investment industry and the potential cost for depositaries, managers and investors.
The Monetary Authority of Singapore released two consultation papers. Our regulatory compliance table summarizes some points for key industry players (market operators and clearing facilities).
The European Commission released proposed rules to amend MiFID I, but is it incremental change or fundamental reform? Our summary examines the potential impacts.
We surveyed financial institutions to understand how they're preparing for and responding to Dodd-Frank, particularly given the aggressive timelines set by regulators.
Based on our Risk Management for Asset Management survey, we've identified 12 actions that will likely help firms improve their risk management processes.
With regulators adopting rules at a steady pace, CCOs are shifting their priorities to ensure their businesses comply with rules.