By FINTECH Books Contributor, Kinsuk Mitra Follow: @KinsukM As the regulatory technology landscape is expected to change dramatically over the next few years we’ll find out who will be the winners and losers in this competitive economic climate. RegTech will impact banks daily business, service levels and operating models. Following Lehman’s default in 2008, which was triggered by significant exposure to over-the-counter (OTC) derivatives -governments and regulators continue to take steps to derisk the OTC market. Their common goal has been to reduce the threat of a counter party failure and averting another financial crash. The succession of MiFID2 and Dodd Frank regulations issued to tackle the risks of these products mean the market will face huge competition from service providers such as Custodians,Tri party agents and new market infrastructure providers such as CSDs, CCPs offering new services. Furthermore, newly created Swap Executions Facilities (SEFs) and Organised Trade Facilities (OTFs) respective electronic trading platforms are planned to be migrated from traditional voice brokered dealing facilities. SEFs and OTFs will offer pre trade information e.g. bid and offer quotes and bring greater transparency to the pricing of derivatives and its trading. OTFs will focus on non-equities derivatives and cash bond markets. NewTrade repositories another requirement, will be used to receive, store and disseminate trade data from a variety of sources including trade counter parties, derivatives clearing organisations and trading platforms which will facilitate market transparency. Regulations impacting the OTC derivative market, mean participants will behave to collateralise greater volumes of transactions. Under EMIR with initial and variation margin requirements, the ‘right’ collateral could become scarce. As a result, they will need to make sure they have access to the right collateral at the right time to support successful trading strategies. If you would like to learn more about FinTech please look at our video courses at FINTECHCircleInstitute.com