The Managed Funds Association “strongly supports” the increase of electronic platforms to reduce backlogs of trade confirmations in equity derivatives, it has said in a statement.
The stance is in response to a recent letter by 18 major derivatives dealers to the Federal Reserve Bank of New York echoing the need for more electronic platforms.
In contrast to the credit derivatives markets, where trading volumes consist largely of interdealer transactions, a majority of trades in the equity derivatives markets are between dealers and buyside counterparties, such as hedge funds, MFA said.
“MFA fully endorses efforts to improve market discipline and efficiency as set forth by the President’s Working Group on Financial Markets (PWG) agreement issued in February of this year,” says John G. Gaine, MFA’s president. “Our ongoing work with the major dealers demonstrates MFA’s commitment to collaborating with counterparties to address the issues presented by the growth of certain over-the-counter derivative markets and to strengthen transaction processing and settlement arrangements.”