Guide to OTC Activities OTC ACTIVITIES, Expanding from plain custody to advanced post-trade services OTC ACTIVITIES (cont.), Areas affected by regulation OTC ACTIVITIES (cont.), Insight into collateral management COMMERZBANK OVERVIEW CCP POWERHOUSES triOptima

1. Pre & Post activities into OTC
Welcome to:
LEARNING UNIT 3 | GUIDE TO OTC ACTIVITIES
‘Activities, offering sample, CCPs’

2. INTRO
Managing OTC activities has become increasingly complex , costly and demanding. The main
for this are:
 Increased regulatory requirements
 Growing reporting burden
 Heightened focus on counterparty risk
Also closer interaction and connectivity with central banks, CCPs, derivative exchanges and
repositories is on the rise.
In this context, a basic knowledge of these activities is convenient.
With this purpose, we´ll be looking at Commerzbank as a practical example of OTC activities,
 Pre- & post-trade activities
 Other than trade execution
 Within an investment bank
Pre & Post activities into OTC

3. ROAD MAP TO THIS PRESENTATION
I. OTC ACTIVITIES, Expanding from plain custody to advanced post-trade services
II. OTC ACTIVITIES (cont.), Areas affected by regulation
III. OTC ACTIVITIES (cont.), Insight into collateral management
IV. COMMERZBANK OVERVIEW
V. CCP POWERHOUSES
VI. triOptima
Pre & Post activities into OTC
 Direct Market Access
 Derivatives Clearing
 Custody
 Collateral Solutions
 Trade Reporting
 Cash & Financing Solutions
 Post-trade Outsourcing Solutions
 LCH Swapclear
 CME
 ICE
 EUREX CLEARING

4. I. OTC ACTIVITIES, Expanding from plain custody to advanced post-trade services
Around OTC trade execution
there are plenty of
pre- & post- activities
Pre & Post activities into OTC

5. II. OTC ACTIVITIES (cont.), Areas affected by regulation
The most important areas are:
 Collateral management
 OTC Clearing
 Trade Reporting
Mainly, OTC players are focusing on improving
collateral management…
…as a way to keep regulation costs and resource
pressures as light as possible.
In terms of allocation velocity, selection of
assets and margining processes.
Pre & Post activities into OTC
And secondarily, efforts are dedicated to:
 Real-time processing and STP of trade lifecycle processes.
 Fully integrated data management and workflows.

6. III. OTC ACTIVITIES (cont.), Insight into collateral management
OTC markets are growing at a time of significant changes as…
 New regulatory regime of central clearing
 And demand for high-quality liquid assets
…has risen to record levels.
Regulation affects how investors manage their resources in terms of reserves, capital and liquidity.
In this sense, the collateral management of assets to comply with this has a significant impact on:
 The pricing of OTC derivatives.
 The profit and loss account of investors.
With a finite market of eligible securities available, active collateral management is now critical for
market participants to trade freely, compliantly and on competitive terms.
Pre & Post activities into OTC

7. IV. COMMERZBANK OVERVIEW
This chart summarizes Commerzbank OTC offering.
Here, we can see how the
bank on its own is capable of
providing certain services, the
ones in orange,
…And then, other services just
in co-operation with its
clearing partner
CLEARSTREAM, in blue,
Pre & Post activities into OTC

8.  COMMERZBANK OVERVIEW: DIRECT MARKET ACCESS
Pre & Post activities into OTC
GOAL, Global access to trade in world exchanges,
BRIEF, DMA enables non-exchange members to,
 Submit buy or sell orders directly to an exchange’s orderbook
 Via multiple connection protocols
 Without going via a broker’s proprietary trading desk
‘Get fast, cost-efficient, controllable and direct trading access, without
the expense and commitment of exchange membership.’
FEATURES,
 Order management Facilitating client executions on an order basis.
 Best execution Full commitment to best execution, including Smart.
 Order Routing (SOR) Order handling support & resolution of client queries across the full trade
lifecycle, from booking, to settlement.
 Special care orders Execution tailored to specific requirements, as VWAP, orders in line with
market volumes & anonymous orders.
 Emergency order processing and cancellation In the event of an outage or disruption.

9.  COMMERZBANK OVERVIEW: DERIVATIVES CLEARING
Pre & Post activities into OTC
GOAL, Meet european regulatory requirements for derivatives clearing (EMIR),
BRIEF, Derivatives Clearing enables non-clearing members to comply in OTC,
‘Comply with EMIR reqs with minimal impact on business activities, internal resources and infrastructure
without the effort of being a clearing member.’
Access to multiple CCPs (central counterparties)
 Connectivity with Europe’s leading EMIR authorised CCPs.
 Advise on the most suitable CCP for your needs, based on
available products and factors such as the CCP’s collateral
requirements, margin modelling and account segregation.
 Dedicated clearing support
 Streamlined onboarding service
 Ongoing insight
 Customised reporting
FEATURES, thru its online Client Portal
Real-time collateral management
Margin scenario analysis ‘what if’ & market data repositories
Trade reporting flexible and adaptable
All thru ‘step by step’ eSupport with,

10.  COMMERZBANK OVERVIEW: CUSTODY
Pre & Post activities into OTC
GOAL, Full client protection from physical safekeeping to sophisticated services,
BRIEF, Custody enables efficient clearing and settlement of assets, whether a
client operates in one market or many,
 with customised operational coverage and support from local specialists
 tailored to a client’s needs and markets,
 Multi-jurisdictional
 Adaptable, Flexible and Customizable
 Integrated with Clearstream
 Dedicated client service support
 German markets specialist
FEATURES,

11.  COMMERZBANK OVERVIEW: COLLATERAL SOLUTIONS
Pre & Post activities into OTC
GOAL, Manage collateral demands compliantly, efficiently and confidently with a
support team managing your collateral flows and optimising available assets.
BRIEF, Our holistic service is
 Collateral Management
 Advisory – bespoke advice
Guidance in terms of CSA, Regulation, CP risk
and its impact on the P&L.
 Optimisation – helping clients use and finance
collateral
Efficient and continuous asset allocation and
reallocation improving financing & liquidity.
FEATURES,
Adaptable (combines well with other Commerzbank solutions).
Customer focussed, impartial and hands-on advice.
Tailor-made services to meet clients’ specific needs and
circumstances.
 Valuation Services – calculating OTC derivative mark-to-market values, exposures and liabilities

12.  COMMERZBANK OVERVIEW: TRADE REPORTING
Pre & Post activities into OTC
GOAL, Ensure regulatory reporting compliance though our cost efficient delegated
reporting offering.
BRIEF, Comply with compulsory reporting of all derivative transactions to an
authorised trade repository in our covered jurisdictions,
 UE client can choose Commerzbank’s solution and/or partners’ solutions for EMIR compliance.
 US and Switzerland just thru partners’ solutions for Dodd-Frank and FinFRAG compliance.
FEATURES,
 Efficient and cost effective
 Secure communications
 Portfolio reconciliation included

13.  COMMERZBANK OVERVIEW: CASH & FINANCING SOLUTIONS
Pre & Post activities into OTC
GOAL, Bespoke financing and liquidity solutions to enhance yield and / or minimise
financing costs.
BRIEF, Assist our clients in optimising financing costs and / or achieving higher yields
through market access.
FEATURES,
 FX Cash Management
 Securities financing and lending
 Cash optimisation
 Tri-party Repo
 GC pooling
 Collateral Financing
Links:
 http://www.eurexrepo.com/repo-en/markets/gc-pooling-market/
 http://www.clearstream.com/clearstream-en/products-and-services/global-
securities-financing/global-liquidity-hub-csd-services/triparty-collateral-
services--xemac-/gc-pooling

14.  COMMERZBANK OVERVIEW: OUTSOURCING SOLUTIONS
Pre & Post activities into OTC
GOAL, Back and middle office functions in order to assist our clients in reducing
overhead costs.
BRIEF, The offering is by nature unique to each client and is tailored after the needs of
our clients,
 Collateral Management
 FX processing
 Dealing Services
 Securities settlements
FEATURES,

15. V. CCP POWERHOUSES
Pre & Post activities into OTC
 LCH GROUP ‘London Clearing House’
LCH is the leading independent clearing house, serving major
international exchanges and platforms, as well as a range of OTC
markets. It clears a broad range of asset classes including,
Here attached a LCH collateral
service brochure to click in,
GOAL: MARKET STABILITY
Risk management is at the heart of what
LCH does. Committed to setting and
maintaining the highest standards across all
asset classes cleared, our world-class risk
management framework provides the
markets with exceptional levels of
protection.

16. V. CCP POWERHOUSES
Pre & Post activities into OTC
 CME GROUP ‘Chicago Mercantile Exchange’
As the world's leading and most diverse derivatives marketplace, CME Group is where the world
comes to manage risk.
CME Group brings buyers and sellers
together through its CME Globex®
electronic trading platform and its
trading facilities in New York and
Chicago.
CME Group exchanges -CME, CBOT, NYMEX and COMEX- offer the widest range of global
benchmark products across all major asset classes, including futures and options based on interest
rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and
real estate

17. V. CCP POWERHOUSES
Pre & Post activities into OTC
 CME GROUP ‘Chicago Mercantile Exchange’
CME Clearing, one of the world’s leading central counterparty clearing provider in the world, which
offers clearing and settlement services for exchange-traded contracts, as well as for over-the-
counter derivatives transactions through CME ClearPort®.
These products and services ensure that businesses everywhere can substantially mitigate
counterparty credit risk in both listed and over-the-counter derivatives markets.
Here attached a brochure to click in,

18. Initially, a single electronic exchange for commodities, The ICE has now expanded into,
 A network of 12 exchanges
more Asset Classes
OTC& Listed dervs
Pre & Post activities into OTC
 THE ICE ‘The Intercontinental Exchange’
GOALS
‘In each of our clearing houses, we work to optimize
capital efficiency for clearing participants around the
world while maintaining optimal levels of initial and
intraday margin to safeguard market stability.’
Clearing services
Margin models
Risk management solutions
 And 6 clearing houses
V. CCP POWERHOUSES

19. Pre & Post activities into OTC
 THE ICE ‘The Intercontinental Exchange’
Here follow The ICE clearing
solutions chart
V. CCP POWERHOUSES

20. Europe's leading CCP clearing house, with
fully-automated, straight-through post-
trade services for derivatives, cash equities,
repo and fixed income transactions
including the clearing of bilaterally agreed
off-exchange transactions.
Eurex Clearing is the world's only major
clearing provider to manage risk
continuously by recalculating position risk
in real-time.
Pre & Post activities into OTC
 EUREX CLEARING
V. CCP POWERHOUSES

21.  EUREX CLEARING: EurexOTC Clear
WHAT Eurex solution for the clearing of ETD & OTC trades on IRS|FRAs|Inflation Swaps, etc.
HOW IT WORKS In the first place reducing
…and at the same time offering
Here follows a detailed account on the clearing of IRS & FRA,
PROFITSBy clearing both ETD & OTC trades thru EurexOTC Clear, clients benefit from significant
margin offsets where there are appropriately correlated risk reductions.
Pre & Post activities into OTC
 Counterparty risk
 Margin and Collateral requirements
 Client Asset Protection (thru segregation)
 Legal certainty
V. CCP POWERHOUSES

22.  EUREX CLEARING: Product catalogue supported by EurexOTC Clear
Pre & Post activities into OTC
Here follow other characteristics also supported,
V. CCP POWERHOUSES

23. triOptima provides critical post-trade infrastructure and risk management services for the OTC
world. It’s main solutions are following after this video
triReduce It’s a multilateral portfolio compression service that reduces
outstanding notionals (or principals) and line items across asset
classes: rates, credit, FX and commodities.
Pre & Post activities into OTC
https://youtu.be/3u8fJObGe8E
triCalculate High performance, centralised XVA, counterparty valuation and
risk analytics for your OTC derivatives portfolio.
triResolve It’s a network community service that provides counterparty
exposure management solutions for  Portfolio reconciliation
 Collateral management
 Reporting validation
triBalance A counterparty risk rebalancing service for those with multiple clearing
relationships.
VI. triOptima

24. Pre & Post activities into OTC
Q & A

25. End of presentation,
Thank you.
Fonetic Trading Unit
LEARNING UNIT 3 | GUIDE TO OTC ACTIVITIES
‘Activities, offering sample, CCPs’
Pre & Post activities into OTC