Sapient Global Markets Survey Reveals Industry Concerns Surrounding Derivatives Clearing
29 Janeiro 2015 - 12:00PM
Business Wire
Industry utility model cited as a potential
solution to overcoming operational cost, complexity and
commoditization of clearing services.
Sapient Global Markets, a division of Sapient (NASDAQ: SAPE),
and leading global provider of business technology and consulting
services for the capital and commodity markets, today announced the
findings of a new survey it conducted examining industry attitudes
towards changes in derivatives clearing.
The survey, which saw a total of
153 qualified respondents, was conducted during the 2014
FIA Expo in Chicago, and revealed three significant
themes. A total of 81% of respondents cited their greatest
concerns as being the uncertainty caused by regulations, the cost
of compliance associated with new clearing mandates and
implementing a new technology solution. To relieve some of these
pressures, more than half of those surveyed also indicated positive
interest in the establishment of purpose-built market
utilities.
- Compliance UncertaintyCentral
clearing mandates are overwhelming firms’ ability to generate the
required reporting due to sheer volume and complexity. The Sapient
survey revealed 41% of exchanges, a similar number of broker
dealers and 43% of HFT terms agreed that continued regulatory
uncertainty and the lack of understanding of changing rules were
the area of greatest concern.
- Cost of ClearingThe central
clearing environment is creating more challenges for businesses to
reach their revenue targets and make the necessary investments to
meet new and evolving regulatory mandates. In the Sapient survey,
40% of FCMs and 37.5% of sell-side firms reinforced this,
highlighting the cost related to new clearing regulations as their
greatest concern. Sell-side firms are especially affected because
it ultimately costs more for them to stay in the business, placing
greater pressure on their current business models.
- Potential of Clearing
UtilitiesOperations and infrastructure is highly commoditized
from one firm to the next, and there is little strategic advantage
or opportunity to differentiate services or increase revenue. As a
result, market participants, regulators and exchanges are beginning
to recognize the idea of clearing utilities as the answer to
reducing the cost of complying with central clearing mandates and
improving business profitability. 50% or more of buy-side firms,
FCMs, proprietary HFT and sell-side firms surveyed were interested
in using a purpose-built utility to address unique buy-side
clearing requirements.
“Regulation is placing tremendous pressure on the clearing
community, with conversations inevitability focused on the costs
involved and how to potentially alleviate them,” commented Jim
Bennett, managing director at Sapient Global Markets. “As a result,
the industry is on the brink of transformation, as firms search for
new ways to differentiate their clearing offerings while
commoditizing the processes that either fail to offer competitive
advantage or require decoupling due to regulatory requirements.
This is especially true as firms consider how to increase
efficiencies, reduce costs and improve returns while addressing the
global nature of these regulations.”
To download a full copy of the survey results, please visit the
Sapient Global Markets Clearing paper.
About Sapient Global Markets:
Sapient Global Markets, a division of Sapient® (NASDAQ: SAPE),
is a leading provider of services to today’s evolving financial and
commodity markets. We provide a full range of capabilities to help
our clients grow and enhance their businesses, create robust and
transparent infrastructure, manage operating costs, and foster
innovation throughout their organizations. We offer services across
Advisory, Analytics, Technology, and Process, as well as unique
methodologies in program management, technology development, and
process outsourcing. Sapient Global Markets operates in key
financial and commodity centers worldwide, including Boston,
Calgary, Chicago, Dusseldorf, Frankfurt, Houston, London, Los
Angeles, Milan, New York, Singapore, Washington D.C. and Zurich, as
well as in large technology development and operations outsourcing
centers in Bangalore, Delhi, and Noida, India. For more
information, visit www.sapientglobalmarkets.com.
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Sapient is a registered service mark of Sapient Corporation.
Sapient Media Contact:Geoff Whitehouse, +44 (0) 207 456
6550gwhitehouse@sapient.com
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