Fri, Jul 28, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Buy-side firms threaten to stop using swaps over fees - Tabb Group

Wednesday, June 13, 2012

amb
Will Rhode
Bailey McCann, Opalesque, New York: Investors and firms are entering the era of transparent, cleared swaps. However, some firms are threatening to stop using swaps as fees have risen to cover the costs of clearing these activities. The capital requirements for using swaps may also be difficult for these firms to maintain, according to a new report from Tabb Group.

The industry will need $1.6tn to comply with new rules, requiring that margin to be deposited with central clearing counterparties (CCP). As firms start to do the math on finding this capital and still more to cover fees, many are finding it hard to justify the cost of swaps. Dealer fees have also increased as dealers sense a new market share opportunity.

"With a dip in liquidity a near certainty, waiting to see who blinks first is never comfortable," says Will Rhode, a TABB principal, director of fixed income research and author of "US Buy-Side Swaps Trading 2012: I Can See Clearing Now," the research firm�s first annual study on buy-side swaps. "Everyone knows clearing�s coming but there�s been little movement, even as the deadlines bear down. These are high-stakes games."��

Report data shows that many firms are taking a wait and see approach to implementation. "Futures will be a beneficiary, and the buy-side will have to learn how to handle basis risk. The mor......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Launches - Bitcoin hedge fund launches ethereum-subscribed ICO investment vehicle, Jersey players institutionalize first regulated crypto-currency hedge fund[more]

    Bitcoin hedge fund launches ethereum-subscribed ICO investment vehicle From Coindesk.com: The operators of a regulated, Jersey-based bitcoin hedge fund have officially closed a new $5 million fund aimed at investing in cryptocurrency tokens and initial coin offerings (ICOs). Backed by fun

  2. SWFs - China Wealth fund backs TPG lender as part of U.S. property push[more]

    From Bloomberg.com: China Investment Corp., the sovereign wealth fund that controls $814 billion in assets, is betting on U.S. real estate by investing in a commercial real estate lender formed by the money management firm TPG. In conjunction with last week's initial public offering of TPG RE Financ

  3. Months to minutes: Enigma launch aims to boost crypto hedge fund creation[more]

    From Coindesk.com: What if starting a hedge fund was as easy as downloading an API? A startup incubated at MIT Media Lab is today revealing a product designed with this ease-of-use in mind. Called Catalyst, the first product offering by blockchain startup Enigma aims to trigger nothing short of an e

  4. North America - Hedge funds disclose their Puerto Rico debt holdings, US dominates new money portion of Greece's debt sale[more]

    Hedge funds disclose their Puerto Rico debt holdings From Reuters.com: A group of hedge funds that hold about $3 billion of Puerto Rico sales-tax-backed debt released a court filing late on Tuesday that revealed how much of the total amount each fund manages. Decagon Holdings LLC,

  5. $25 million cryptocurrency fund launches to capitalize on the "internet of the future"[more]

    From Coindesk.com: General Crypto, a $25 million cryptocurrency hedge fund, has launched to provide high net worth investors with liquid exposure to the cryptocurrency market and digital assets that they believe could run the technological infrastructure of the future. Since the start of 2017, the t