Regulation spurring demand for OTC derivatives techies

8 July 2009

2 minute read

Regulation spurring demand for OTC derivatives techies

The European Commission has set out a series of initiatives around the clearing and settlement of the OTC derivatives market, which broadly mirrors that of the US regulatory proposals. Central to this is investment in technology and there are signs that the market is picking up for expertise in this area.

The EC believes that financial markets should invest heavily in post-trade automation and standardised data management systems, in order to unravel the "complex web of mutual dependence" around the OTC derivatives market.

"Several clearing and settlement companies trimmed their staff towards the end of 2008 and are currently operating an extremely lean IT staffing model," says Nick Finlay, senior specialist financial markets recruiter for Harvey Nash.

But the focus seems to have shifted from the front office to the back office when it comes to technology investment this year. The annual Technology Management Conference hosted by the Securities Industry and Financial Markets Association in the US suggested the focus was now on the post-trade environment.

The EC's proposals, coupled with similar suggestions from Tim Geithner, the US treasury secretary, over the way derivatives are regulated has meant a bit of shift in demand for techies in this space, says Finlay.

"We predict a moderate upturn in IT hiring for the clearing and settlements sector during the last six months of 2009. One thing is for sure, the landscape will look very different in 2010," he says.

Salaries for IT professionals in OTC derivatives:

Source: Harvey Nash

AUTHORPaul Clarke

em
emilio13
10 July 2009
Makes sense. New regulations & OTC standardisation (if possible via market-wide agreement) will give financial tech firms (MarkiT & the like plus) a massive boost to revenue & profile etc
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Wi
Wizard of EC1
9 July 2009
..... more Q1 2010 when the panic really sets in. IB management has a habit of only reacting when the steam train is about to hit them. These models tend to assume that there are hoards of folks out there just waiting for the banks to start re-hiring. That is an imperfect model. I suggest that not everyone will want to grab the first opportunities, rather wait till comp levels start to return to attractive levels. As I have said repeatedly, not all change people ( it's not just IT change ) are out of work, desperate to return to the benevolent organisations that fizzed them to protect bonus pools - a proportion of change people have seen that the grass can be just as green elsewhere - in short, the skills pool has shrunk. Expect comp inflation for change people from Q3 2010. I also predict consultancies will grow as Bank management will not be nimble enough to engage talent and under Regulator compliance pressure, will have to turn to consultants to provide change teams. Hold your cards and wait for a better deal ....... It will happen, as it did before post 2003, only this time the reputation of the industry is seriously tarnished.
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