Opinion & Analysis

At the TUC’s “ABCs of CDC” conference, my good friend Bernard Casey of Warwick University asked a question of Gregg McClymont, the Shadow Pensions Minister, as to the sources of the superior projected performance of CDC over individual DC. The question was “Different speakers have emphasised the "main" advantage of CDC. One said it reduced volatility. Another said that it generated higher returns because it allowed investing long term, and in higher risk assets, and a third that it generated better returns because, via scale economies, costs were lower. Which is it?”


Codes to label trades between counterparties are essential to enable trade repositories to match counterparties, and reconcile trades with other repositories, but the European regulator did not publish advice until it was too late, and even then left ample scope for interpretation.

The pressure from regulators to assign a unique code to every counterparty to a financial transaction is the gift of Lehman Brothers to the world. In derivative trade reporting it is, along with unique transaction and product identifier, the key to making sense of the data. It is not yet clear whether multiple issuers are part of the problem or part of the solution.

With standard OTC derivative trades moving into a clearing model alongside exchange-traded derivatives and even collateralisation of non-clearable derivatives now mandatory, trade repositories are expected to collect information on the nature and value of the collateral posted against open positions on a daily basis.

Thomas Murray IDS looks at some of the implications AIFMD will have on asset safety...