NetOTC, the risk solutions firm that has been designing and building a full end-to-end market infrastructure for non-cleared OTC derivatives in close collaboration with regulatory and industry bodies, banks and their end customers, has put its initiative on hold.
Roger Liddell (pictured), CEO, NetOTC, says: "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.
“For this September, however, 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."
