In Q1, LCH’s SwapClear cleared
1.2 million trades
with record buy-side volumes of
$56 trillion
notionally cleared.
Of which
$2.4 trillion
in notionally cleared FX derivatives from over
333,000 trades
$858 billion
in notionally cleared
inflation swaps
– some, but not all - the brokers
were during the process which,
given the volume of change is
understandable; however we are
left now in a state of trying to tidy
up agreements that were rushed
through. Brokers who outsourced
the process have moved away from
umbrella agreements for some
inexplicable reason,” says the operations head.
“[It’s] very much admin noise
rather than legal issues, but it does
leave us staring down at a clean-up
exercise for the next few months
before we prepare for the next
round and move to include all FX
forwards.”
This experience reflects the
growing suspicion among the buy-
side for using third-party providers
and brokers for functions they can
easily perform in-house.
For some of the larger asset
managers that are using expensive outsourced solutions, there
is a growing demand to hire new
people in non-traditional specialist
roles, such as heads of cash/collateral management.
“The buy-side are looking more
towards an all-inclusive liquidity
and cash/collateral management
function out of a need to better
manage their cash exposure and
related risk,” says Joshua Satten,
director of business consulting,
Sapient Global Markets.
“They want forecasting abilities
and analysis; asset managers need
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LCH