It’s not that compliance has become glamorous, but it does apply to everybody, so market participants are turning to technology providers to ease their way into complying with the mass of regulation being spewed out. This adaption to regulation has dominated structured products for the last year and more, as regulators complete their investigations and come to terms with directives that have now, generally, reached the implementation stage.
Market participants have had to respond to the emerging requirements of the Dodd-Frank Act, Basel III and other regulations, including the move to central clearing for certain over-the-counter derivatives, as well as the need to calculate the credit value adjustment of trades. The financial crisis has also resulted in a dramatic shift in the industry in valuing collateralised derivatives trades using overnight indexed swap curves.
As well as compliance, technology providers have needed to steer away from innovation and instead concentrate on creating systems that allow for greater product and pricing transparency.
This year’s Structured Products Technology Rankings survey is included in this directory to provide an indication of which providers have fared best in navigating their way along the path to compliance and transparency.
Although there were no significant new entrants into the rankings, the pack has been well and truly shuffled across most categories this year.
The one area in which technology firms have been able to expand their offering is in wealth management, reacting to a shift already made by product providers seeking regular business that is also less hamstrung by the advent of regulatory zeal. This move has been accompanied by a shift from the traditional mind-set of maximising returns to maximising the probability of achieving the personal financial goals of individual clients.