Japan fears collateral optimisation will impact on profits
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Japan fears collateral optimisation will impact on profits 16 August 2013Tokyo Reporter: Georgina Lavers
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A survey at recent Calypso event in Tokyo highlighted the state of OTC clearing in Japan.
It is expected that OTC client clearing will be mandated within 2014 in Japan. In a survey of attendees, participants shared their concerns and plans to implement an OTC clearing infrastructure and strategy in Japan.
Twenty percent of the survey respondents are currently operationally ready for OTC clearing. More than 50 percent of those firms said that they are actively searching for a new system to help them with operational compliance.
In the survey, over 50 percent of respondents revealed concerns that collateral management/collateral optimisation will impact their business profitability once OTC client clearing becomes a reality.
“The urgency of collateral management is felt more gradually than the need to clear trades, as underlying investors and portfolio managers begin to see the direct cost of collateral impacts to their returns,” states Josh Galper, managing principal at Finadium.
Conference attendees were also polled on how they would select clearing brokers. The majority of respondents highlighted that breadth of services was the most important attribute when selecting a CCP partner.
A survey at recent Calypso event in Tokyo highlighted the state of OTC clearing in Japan.
In terms of the most valuable clearing services, operational support around connectivity and risk and margin management topped the list.
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