Derivatives Trading Forum 2013 New York City will provide attendees with the most up-to-date overview of the present and future of derivatives, closing with a cocktail reception that will bring the best of derivatives networking to Derivatives Trading Forum 2013 New York City.
8:30AM - 8:45AM
8:45AM - 9:00AM
9:00AM - 9:45AM
Opening Keynote Speaker
9:45AM-10:30AM Challenges for Hedge Funds and Asset Managers to Execute, Clear, and Report Swaps
The Dodd-Frank Act requires to clear certain types of interest rate swaps and credit default swaps. This clearing mandate started in March 2013 for a subset of market participants, with further phases to follow in June and September this year. Combined with the EUâ€™s EMIR that was enacted in January, both of these initiatives will mean the vast majority of OTC interest rate swap contracts will have to be centrally cleared. There are an estimated 4,000 buy-side firms that will have to comply either with US or European legislation, and approximately 20 clearing members offering client clearing (many more banks are clearing members for only their house trading activity).
- How big of a change are these requirements for hedge funds and asset managers in particular? Which portion of asset managers and hedge funds' portfolios are currently clearable?
- What systems and tools are available to calculate both the amount of margin required and the securities that can be pledged to meet the margin obligations?
- Will clearing members have capacity constraints and be unable to serve as a clearing member for all of their clients?
10:30AM - 11:00AM
Walking on a Tightrope while Avoiding Swap Execution Facilities Landmines
Title VII of Dodd-Frank was passed to redress deficiencies in the derivatives market. Among other provisions, Title VII required most "swaps" and "security-based swaps" to be executed on regulated trading platforms called Swap Execution Facilities. The CFTC and the Securities and Exchange Commission have been charged with implementing SEF regulations for swaps and security-based swaps, respectively. After a long waiting period, SEF rules were finalized on May 16 by the CFTC; now the spotlight falls on firms planning to register as SEFs. But the finer details of the rules have created new areas of concern, and would-be SEFs are still struggling with a lack of regulatory clarity.
- What products will SEFs have to offer? What products are in the pipeline? What needs to be considered when executing on SEFs?
- What would-SEFs be required to operate via the preliminary approval system before full compliance is mandated?
- What strategies banks with single-dealer platforms will deploy regarding the wave of SEFs? Will they continue to invest in single-dealer offerings?
11:45AM - 12:30PM
Understanding the Costs of Clearing, Margining, and Collateral Management Under Dodd-Frank
Legal experts have predicted that a Bloomberg Challenge to proposed rules from the CFTC could prove pivotal in determining the success of sweeping new reforms to the US derivatives market. Bloomberg, which is planning to launch an SEF to protect the revenues they currently make from facilitating bilateral trades, is claiming that the CFTC has created an uneven playing field by making it far more expensive to trade and clear derivatives on an SEF than on an exchnage; this is because the margin that must be posted against an SEF-traded product could be up to five times greater than against the equivalent exchange-traded swap future. Bloomberg says the CFTC's rules threaten the viability of SEFs as trading firms would simply switch to future exchanges, where similar products would be cheaper to trade.
- What is the impact of the new regulations on costs and margining? How advanced are margin regulations for uncleared swaps?
- Should Derivatives Clearing Organizations (DCOs) have the power to establish liquidation times for certain products?
- Will recent OTC clearing initiatives result in the reduction or increase of the counterparty risk exposure?
- How real are the benefits of cross-margining? Will or should clients clear futures and OTC derivatives with the same firm?
- Will the rise of collateral requirements impact sourcing eligible collateral and collateral's availibility?
12:30PM-2:00PM Lunch Keynote Speaker
2:00PM - 2:45PM
The Exchange-Traded Derivatives Changing Landscape in 2013 and Beyond
After a decade of unprecedented growth, the exchange-traded derivatives (ETD) industry, traded via specialized exchanges, was subject to a sharp correction during the global financial crisis. Volatility increased and contract volumes plunged. Furthermore, the number of derivatives traded on exchanges worldwide fell last year for the first time since 2004, according to the data. About 21 billion contracts changed hands on exchanges last year, down from 25 billion in 2011. Will persistent uncertainty be reflected in a greater need for hedging? Will the return in volumes on the underlying cash markets aid derivatives volumes? Will this steady move inevitably bring more regulatory oversight as well? Which strategies for trading and analysis are now available as a result of new technology and global expansion? Which key areas derivatives traders should be looking at in 2013 and beyond?
- Will persistent uncertainty be reflected in a greater need for hedging?
- Will the return in volumes on the underlying cash markets aid derivatives volumes?
- Will this steady move inevitably bring more regulatory oversight as well?
- Which strategies for trading and analysis are now available as a result of new technology and global expansion?
- Which key areas derivatives traders should be looking at in 2013 and beyond?
2:45PM - 3:15PM
3:15PM - 4:00PM
In Search of a Joint Approach for Cross-border Clearing in America, Europe, and Asia
Leaders of the Groups of 20 economies (G20) pledged in 2009 to make off-exchange traded derivatives like credit default swaps more transparent. Regulators' focus was on derivatives because of the central role they played in the financial crisis; lack of transparency created uncertainty over who was exposed when Lehman Brothers and insurer AIG got into trouble. Regulators initially wanted rules in place by the end of 2012, but this has proved difficult to achieve. The delay was partly because regulators wanted a common approach to avoid costly overlaps that could distort markets and competition among banks. Therefore, differences have emerged over how far each country can regulate "cross-border."
- How will cross-border clearing work? How is collateral treated? Which are the current and proposed arbitrage settlement procedures?
- How will equivalence and substituted compliance issues be resolved? Will a substituted compliance regime based on regulatory outcomes trump a rule-by-rule assessment of an overseas regime?
- Will the SEC be successful in trying to broker a compromise by proposing a more accommodative "middle way" welcomed by global regulators?
4:00PM - 4:45PM Closing Keynote Speaker
4:45PM - 5:00PM
5:00PM - 7:00PM