This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Infographic: Key Takeaways From State Street's Derivatives Readiness Vision Paper

Stocks in this article: STT

State Street Corporation (NYSE: STT), one of the world’s leading providers of financial services to institutional investors, today announced the findings of a new Vision report entitled, “Charting New Territory: Buy-Side Readiness for Swaps Reforms,” exploring the readiness of institutional investors for derivatives reform. Based on TABB Group research commissioned by State Street, the report explores the readiness of buy-side swap market participants who collectively represent more than $10 trillion in assets under management. The findings illustrate the state of the industry’s readiness to implement the key provisions of swaps reform, and describe the heavy focus firms are placing on the clearing aspect of regulatory requirements while struggling to adjust to new margin demands.

Key highlights from the Vision report include:

  • Margin requirements are the No. 1 focus for buy-side firms when preparing for regulatory reform
  • Financial strength is the No. 1 factor when selecting a central clearing counterparty
  • A drop in liquidity was cited as the most likely unintended consequence of regulatory reform
  • More than one-third of buy-side firms do not have the high-grade collateral required to enable swaps trading in a centrally cleared world
  • Reporting is the regulatory component for which buy-side firms feel least prepared

The report also explores the key issues the buy-side must solve to successfully transition to the post Dodd- Frank environment including:

  • Overall buy-side readiness for derivatives reform in various categories including registration, capital/business standards, trading technology, selection of futures clearing merchant (FCM) or swap execution facility (SEF) and organized trading facility (OTF), and reporting
  • Key concerns for the buy-side with respect to the pending changes
  • The services and other factors that could influence decisions to choose an FCM, SEF, and central clearing counterparty (CCP)
  • Potential unintended consequences of regulatory reform

“The buy-side supports the idea of transparent markets and the entry of new participants to compete in a market place traditionally dominated by a few key players, and generally sees the regulations as fair and benign, but also as more costly,” said Clifford Lewis, executive vice president and head of State Street’s eExchange business. “However, the process of transformation is challenging and it dominates the buy-side’s thinking. They see a long road ahead before there will be collateral-efficient clearing solutions, competitive electronic execution and increased volumes that mitigate concerns about liquidity.”

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs