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Unsurprisingly a lot of the focus was on Collateral due to the changes in regulation, and there were some common, interesting themes – the importance of straight-through processing, the power of collateral optimization, and collateral velocity and how the movement of collateral and timeliness have improved.But the theme wasn’t about how everyone was benefiting from these, it was about how very few have these things — despite the amount of innovation and advanced technology available in the market across Collateral workflow, optimization and even front-office, pre-trade analytic tools.I know I wouldn’t be the only one to say that from experience those people who designed those processes move and take their knowledge with them.

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As always, it attracted professionals within the industry who came together to discuss the current state of collateral management, clearing, regulation and other topics related to derivative operations and processing.First, the regulators have focused on the importance of exchanging margin on uncleared OTC derivative transactions, with the result ensuring the implementation of processes that will significantly reduce the level of risk that existed until now.Second, advances in technology give firms powerful tools in Collateral workflow, regulatory reporting and optimization. By introducing the new regulations, firms who trade but don’t clear their OTC derivative transactions are subject to daily variation margin exchange, and for the larger firms, daily initial margin came into effect September 1, 2016 and continues to roll through each year until 2020.From our own analysis and from what we have seen both from other research and the comments at Deriv Ops, approximately 3% to 5% of the market were ready for the new variation margin requirements on March 1, which despite some of the hazy regulatory changes, are now subject to delayed enforcement until September 1.Some very large dealers even reported they would only be 25% compliant with the new rules as of May 2017 – and some of these firms also have the initial margin deadlines looming.