Sat, Apr 21, 2018
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. Investing - Sequoia takes Facebook stake as shares slide in data controversy, $1.4b hedge fund sees intact fundamentals for Facebook, Jim Cramer reveals some 'suggested hedge fund trades' amid the Trump tariffs[more]

    Sequoia takes Facebook stake as shares slide in data controversy From Bloomberg.com: The $4.2 billion Sequoia Fund bought a small position in Facebook Inc. as the stock slid late in the first quarter, investment manager Ruane, Cunniff & Goldfarb told clients. "The recent controversy enab

  2. Activist Investors - Blue Sky-owned Wild Breads faces uncertain future[more]

    From AFR.com: A Blue Sky private equity investment in artisan-style baker Wild Breads enjoyed multiple valuation upgrades despite losing millions and breaching its lending covenants, accounts lodged with the regulator last week show. Wild Breads lost $2.4 million in 2017, but Blue Sky ascribed a hig

  3. Opalesque Exclusive: Barnegat to close hedge fund to outside investors on weak opportunities[more]

    Komfie Manalo, Opalesque Asia: Bob Treue's Barnegat Fund Management said it is closing its $666m fixed income relative value hedge fund to outside investors. "The negative side to gains in Fixed Income Arbitrage is that unless we find new opportunit

  4. Investing - Hedge fund makes a big bet on malls, British hedge fund manager Odey short UK government bonds on QE bet[more]

    Hedge fund makes a big bet on malls From Barrons.com: The dominant narrative on American shopping malls is that they're dead. Crushed by Amazon.com, many brick-and-mortar retail stores are destined for bankruptcy. And where is the most retail, clustered all together? Malls. From a

  5. Performance - Hedge funds suffer first back-to-back loss in two years, Netflix performance burns hedge fund short sellers, Macro hedge fund up 14.5% in first quarter sees dollar falling, Renaissance Technologies rebounds across hedge funds in March[more]

    Hedge funds suffer first back-to-back loss in two years From Bloomberg.com: Hedge Fund returns sank for a second straight month in March, the first back-to-back loss since the first two months of 2016, as trade wars, tech-sector woes and a Fed rate hike dragged down the S&P 500 from its