Spotlight on thought leadership, industry trends, Neo in the press and more.
Although the number of financial institutions that issue listed warrants has declined in recent years, the Hong Kong-listed warrant market, already the largest warrant market in the world, in terms of volume, is poised for record issuance in 2015. Trading volume, which averages the equivalent of US$1.7 billion each day, and accounts for 20 percent of the equity market’s turnover, could grow by as much as 30% next year.
Strengthening the outlook is the prospect of increased equity market volatility, creating more opportunities and demand among the retail investors and arbitragers who trade in the listed warrant market. Another major potential driver of growth is the boost to overall equity market trading volume, which is expected as a result of the introduction of Mutual Market Access (MMA) between the Shanghai and Hong Kong stock exchanges, which is scheduled for 17 November 2014.
A renewed focus on consolidation and collaboration across Asia Pacific (APAC) exchanges and central counterparties (CCPs) has characterized 2014. While the APAC OTC market represents just 8% of global turnover in OTC derivatives, it is nevertheless, a $56 trillion market and global exchanges are seeking to extend their presence in the region by acquisition, establishing new clearing houses and developing partnerships with regional exchanges.
In part, these moves are underpinned by a growing appetite for derivative products based on APAC markets but the ramifications of structural market reforms have also acted as a powerful catalyst for consolidation among exchanges and CCPs. This remains a focal point for APAC market participants as OTC activity shifts gradually towards being cleared on CCPs. While the harmonization of rules across exchanges, CCPs and regions remains some way off, the potential benefits of gaining critical mass as the clearing house of choice for specific asset classes and currencies, is widely recognized.
UBS picked up the prestigious award for 2014 Electronic Platform of the Year at the Global Derivatives Awards dinner hosted by capital markets chronicle, GlobalCapital.
The awards honor the people and companies that made an impact on the global derivatives market over the course of the preceding twelve months.
At first blush, a single-dealer trading platform with aggregation capabilities would seem like an astonishingly simple idea. And yet, it’s at the conceptual level where any simplicity ends, and the long, hard technology work begins. For that reason, the Neo platform from UBS, this year’s winner for best broker-dealer, is perhaps the most deserving of all the Waters Rankings victors, even if it is also one of the newest.
When the CFTC's Made Available to Trade (MAT) determinations in mid-February initiated mandatory trading on Swap Execution Facilities (SEF's), some headlines declared it the swap market's "Big Bang." On reflection, the start of SEF trading likely marked the beginning of what could be more appropriately described as the market's "Big Build."
Understandably, market participants have moved with care and deliberation in this evolving market environment. Some end users and other participants who did not have a compelling need to trade regularly retired to the side-lines while they assessed their approach to the new market structure. Other participants have limited activities to transactions that do not yet fall within the current MAT scope.
U.S. regulators are forging ahead with an ambitious plan for a comprehensive, centralized system that would track every U.S. equity trade by every market participant. Market participants can expect to hear more about this unprecedented surveillance and data-collection project - dubbed the Consolidated Audit Trail, or CAT - as the September target date for releasing details of the plan approaches.
CAT represents a game-changing shift in regulator's oversight capabilities with significant implications for all market participants. Once operational, the system would collect in a centralized database every trade and link it to a specific customer.
Eris Exchange announced today that live streaming prices for Eris Swap Futures are now available through the UBS Neo platform, a cross asset class platform featuring buy-side focused agency execution services. Additionally, end-users can now trade Eris Swap Futures by calling the UBS execution services desk. UBS can facilitate central limit order book trades in Eris SwapBook, as well as block trades, and a variety of packaged trades including swap spreads, asset swaps, curve trades, and baskets of Eris Swap Futures.
As regulations continue to reshape the global financial marketplace, single-dealer platforms are being forced to rethink how they operate. Influenced by ever-increasing consumer use of technology and social media, and determined to put their clients in the driver's seat, investment banks are building hyper-connected platforms. Marina Daras looks at how some firms have invested time and money to make their platforms more 'sociable.'
UBS' Neo platform has stood out in the market in providing clients with access to multiple swap execution facilities without clients needing to become a direct participant of a SEF; the first dealer to provide such SEF services in the new market structure. The platform gives clients access to greater liquidity, while reducing the legal burden that derivatives regulation has imposed on market participants. The innovative solution, coupled with the positive feedback from buyside market participants, is the reason why UBS Neo was crowned Electronic Trading Platform of the Year at the 2014 GlobalCapital Americas Derivatives Awards.
Equity swaps, once mainly the province of hedge funds, are being embraced by a widening group of investors in the U.S. market as a significant part of their investment strategies.
A number of big picture trends are driving this increased interest, including reforms to cash and derivatives markets and Governments' throttling back of liquidity support for markets as economic growth continues. Complicating the picture are tighter capital requirements for major lenders.
What sets excellent organizations apart? What makes one so much more effective than another? What enables their teams to outperform others - and do it consistently over time?
More important, can the excellence of a team or organization be transferred to another - either by products, services, technology or a learning process? I believe it can.
The key to it is the thinking process itself, how we think as individuals and as teams, how we access and use relevant information and discard the irrelevant and how we build different ideas together to create novel structures and genuine business innovation.