NetOTC Suspends Market Infrastructure Initiative, Citing Regulatory Challenges
- NetOTC's promising initiative has stalled after being halted indefinitely by regulatory hurdles.
NetOTC, a risk solutions firm, has pumped the brakes on its end-to-end market infrastructure initiative, following a number of barriers from new regulations that ultimately sapped the project of momentum, per a recent NetOTC development.
The new world of Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term, Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term and marketing – register now for the Finance Magnates Tel Aviv Conference, June 29th 2016.
UK-based NetOTC had been pioneering a fully integrated end-to-end market infrastructure for non-cleared over-the-counter (OTC) derivatives, working in conjunction with a plethora of regulatory and industry bodies, banks, and their respective clientele. However, the project ran into some early headwinds, which plagued the initiative, ultimately causing the group to put the entire process on hold.
Indeed, according to Roger Liddell, NetOTC’s Chief Executive Officer (CEO), in a recent statement on the initiative: "We developed the NetOTC pooled initial margin structure to make the use of collateral both more effective and more efficient. Core to our ambition was the objective to increase market safety and to protect against collateral exhaustion. To achieve this, we have worked with industry participants to create an end-to-end technology platform, a legal structure and a margin model, and we have been impressed by the appetite of the industry to engage and proud of the infrastructure model we have created.”
As a result, the project will be put on hold indefinitely, pending some regulatory breakthrough or shift in policy that has to date prevented the infrastructure from launching. Mr. Liddell left open the possibility that the project could be restarted, though there were presently no material plans to do so.
“The regulations do not currently allow for a more efficient use of collateral and do not envisage a pre-determined orderly default management process. Both would have contributed substantially to regulators’ stated objective of sound, stable, resilient, transparent and orderly markets. I look forward to a more favourable regulatory environment in the future that will see NetOTC's market infrastructure solution reinvigorated,” noted Mr. Liddell, who conceded the difficulties in a 2016 launch.
NetOTC, a risk solutions firm, has pumped the brakes on its end-to-end market infrastructure initiative, following a number of barriers from new regulations that ultimately sapped the project of momentum, per a recent NetOTC development.
The new world of Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term, Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term and marketing – register now for the Finance Magnates Tel Aviv Conference, June 29th 2016.
UK-based NetOTC had been pioneering a fully integrated end-to-end market infrastructure for non-cleared over-the-counter (OTC) derivatives, working in conjunction with a plethora of regulatory and industry bodies, banks, and their respective clientele. However, the project ran into some early headwinds, which plagued the initiative, ultimately causing the group to put the entire process on hold.
Indeed, according to Roger Liddell, NetOTC’s Chief Executive Officer (CEO), in a recent statement on the initiative: "We developed the NetOTC pooled initial margin structure to make the use of collateral both more effective and more efficient. Core to our ambition was the objective to increase market safety and to protect against collateral exhaustion. To achieve this, we have worked with industry participants to create an end-to-end technology platform, a legal structure and a margin model, and we have been impressed by the appetite of the industry to engage and proud of the infrastructure model we have created.”
As a result, the project will be put on hold indefinitely, pending some regulatory breakthrough or shift in policy that has to date prevented the infrastructure from launching. Mr. Liddell left open the possibility that the project could be restarted, though there were presently no material plans to do so.
“The regulations do not currently allow for a more efficient use of collateral and do not envisage a pre-determined orderly default management process. Both would have contributed substantially to regulators’ stated objective of sound, stable, resilient, transparent and orderly markets. I look forward to a more favourable regulatory environment in the future that will see NetOTC's market infrastructure solution reinvigorated,” noted Mr. Liddell, who conceded the difficulties in a 2016 launch.