“As an industry, we’ve invested in new products and risk management,” said José-Luis DeJesus, executive director, operations at UBS in London. “We haven’t focused on processes, most trade confirmations are still done by fax.”
The Equity Derivatives Market Forum, a group that has grown out of lock-in meetings where dealers cleared up problem trades, will also be working to increase documentation standardisation for trade templates and master agreements, as well as to promote the development of electronic means to match and confirm trades.
“We’re going to be firming up our views to bring to Isda, and each house needs to look into electronic platforms to see how we can connect better,” said UBS’s DeJesus. “We’re at a crossroads. We need to be more decisive about engaging market utilities and making the next step.”
This initiative comes as the credit derivatives market has been trying to solve its operational problems for over a year.