Skandinaviska Enskilda Banken AB (SEB) has partnered with OSTTRA to leverage our Equity CCP Connect service for OTC equity derivatives clearing, underscoring SEB’s commitment to innovation and operational quality in their Prime Finance business.
The Challenge: Navigating Complexity in OTC Equity Derivatives Trading
The equity derivatives market has witnessed significant growth in recent years, driven by factors such as increased investor demand for sophisticated hedging and investment strategies, as well as the rise of algorithmic trading and the need to manage complex exposures. However, clearing these instruments, particularly in the OTC space, presents unique challenges: Unlike standardised exchange-traded derivatives, OTC equity derivatives often involve customised terms and non-standard contract structures. This complexity necessitates specialised clearing solutions that can accommodate variations in notional amounts, underlying assets, and settlement dates.
Furthermore, the regulatory landscape for OTC derivatives has undergone significant changes, with regulations such as Dodd-Frank, EMIR, and the more recent EMIR Refit (effective in 2024) introducing mandatory clearing requirements for certain products and demanding greater transparency and risk mitigation in post-trade processes.
The Solution: OSTTRA Equity CCP Connect
OSTTRA’s Equity CCP Connect addresses these challenges by providing a comprehensive platform specifically designed for managing the central clearing of OTC equity derivatives. The service automates key processes, including trade matching, novation, and settlement, while helping to enable compliance with evolving regulatory requirements. By mitigating counterparty risk and promoting greater transparency, Equity CCP Connect enables firms like SEB to manage their exposures effectively and optimise their clearing operations.
“OSTTRA’s Equity CCP Connect is a valuable addition to our synthetical product offering and clearing infrastructure. Its functionality and focus on solving its clients’ regulatory compliance challenges give us confidence that we can meet the evolving demands of the equity derivatives market while providing our clients with the highest level of service”
– Jonathan Holm, Head of Prime Brokerage at SEB
Gabriel Vimberg, Head of Derivatives Clearing at SEB, adds: “We selected OSTTRA’s Equity CCP Connect due to its ability to handle the complexities of OTC equity derivatives clearing, its robust risk management capabilities, and its alignment with our commitment to providing innovative and efficient solutions for our clients.”
Joanna Davies, Managing Director at OSTTRA, welcomes SEB to the growing network of firms utilising the service:
