Techies still waiting for OTC derivatives hiring spree

OTC derivatives are, of course, on the cusp of being subject to a raft of regulatory changes from lawmakers on both sides of the Atlantic. While investment in new technology remains central to achieving compliance, firms have yet to recruit IT staff in significant numbers in anticipation of this.

The push towards greater transparency and a reduction of systematic risk in the OTC derivatives market is likely to involve extensive investment in technology. Firms are already looking at IT required to achieve this, according to a recent survey by TowerGroup for vendor Sungard.

One of the main issues centres around operational risk - the manual nature of trading and post-trade processing means this is particularly acute in the OTC derivatives market.

"Early adoption of trading, risk management and reporting technology is a sure way to get a head start on achieving future regulatory compliance," said John Burchenal, managing director of post-trade processing firm Omgeo.

So far, though, there's currently little indication of this IT investment from a hiring perspective.

"It's usually a fairly buoyant business area, but we've yet to see a significant uptick in anticipation of regulatory action," says Paul Elworthy, director, IT, banking and finance at recruiters Hudson.

Other recruiters we spoke to concurred - the level of recruitment related to OTC derivatives technology is broadly in line with what they would expect at this time of year.

Part of the reason for the recruitment reticence is no doubt down to the fact that regulatory changes have still yet to be firmed up, and until the final details are confirmed it's impossible to know what compliance of will actually involve.

Still, when these are outlined "it is clear that players will need to undertake considerable work on both technology and operations fronts to address these requirements," suggests Stephen Bruel, research director at TowerGroup.