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Derivatives reform chaos “stupid and self-inflicted” 

January 17, 2014
Elliot Holley, Banking Technology

Reforms to the way derivatives are traded in the US and Europe are causing a conflict between consumer desire for bespoke solutions and regulatory attempts at standardisation – and the self-inflicted panic as the deadline approaches indicates the cost may be too high, according to a panel of senior capital markets representatives speaking at an event organised by the Futures and Options Association in London .

“It’s a huge change and huge drain on manpower, resources and finances and we haven’t got a lot to show for it,” said Steve Stewart, managing director of Europe at futures software company Trading Technologies. “We will need to make changes to risk components, including changing front ends and order types. We’ve got 40 markets we connect to, each with different regulators and guidelines. But we may not be able to continue to move our businesses forward because the cost of regulation could potentially stop us from growing our business and working on new functionality and new markets.”

Read more: Banking Technology

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