venerdì 17 dicembre 2010

Global market social networks integration

The proposal for a Social Credit Execution Facility (SCEF)

An Overview
Legislative bodies in the U.S. and Europe are moving to increase regulation of the over-the-counter (OTC) derivatives market.
On  the side of the social network platforms like Facebook, a similar reform proposal can seek to achieve three key objectives:
  • Increase transparency
  • Improvesocial markets awareness efficiency
  • Prevent market abuse by the key players
Many reforms continue to be debated, one of which could concern the creation and definition of a Social Credit Execution Facility (SCEF) and its impact on how adwertisement and intellectual propriety trades are executed and cleared in social network platforms.
The expected role of a SCEF is to provide pre- and post-advertisement transparency, encourage collaborative execution for the entire capital marketplace, and provide the tools required to ensure a complete record and audit trail of shared trades. There could be a significant shift in the way shared trading is ultimately executed, and the users trust to be ahead of the curve for their friends.
Facebook is the leading provider of non-competitive electronic interest social networks ; an open collaborative rating platform with universal access representing more than 500,000 active users globally interconnected.
How derivatives are currently traded in the capital market of debt titles an can be present in social credit market
Over-the-counter, or "privately negotiated", derivatives are currently traded increasingly on electronic markets, . There are two sectors of the market: institutional dealer-to-client (D2C) and inter-dealer (D2D). These markets are approximately the same size in terms of trading volumes, but there are many more participants in the D2C marketplace than D2D.
In social platform the corrispondance is a traditional client-to-user (C2U) copyleft sector and inter-user (U2U) creative commons sector. C2U electronic trading shares are more then 50% of ther overall consumption time in user activities in front of less content creation consumption time.
Electronic debt trading system interfaced with a collaborative credit sharing system offers the benefits that are being sought by legislators, including increased transparency and equity, more competitive execution of social agreements, efficient trade and share processing content lifecycle vales (like the originate and distribute philosophy of the derivative but in a rational personal credit system ), and a complete and permanent audit trail user engagement. In the same time building a collaborative social credit execution facility for credit titles can stady a flexible and sustenable growth perspetive for financial (private)and social market together.

Currently, all exchange-traded and some OTC-traded derivatives contracts are cleared - the process in which financial transactions are cleared by a single (central) counterparty to reduce individual risk (see Figure 1). However, pending legislation could mandate central clearing for all standardized OTC swap contracts.
Figure 1: Central Feedback Clearing Process for OTC Deployment

Central feedback clearing of derivatives reduces counterparty risk and strengthens overall market integrity. It also helps with position segregation and portability in the event of a default, improves transparency for regulatory requirements and benefits the central management of trade lifecycle events, such as cash settlement with central counterparties and credit cash flow medium term open market operations. There are several select companies that provide derivative clearing services in the U.S. and Europe, and Tradeweb in this proposal is only taken for example .
The electronic links to the major derivatives clearing houses further aligned in social networks with a regulatory shift due to the needs of the marketplace, allows institutional clients to fully automate their content workflow both on settlement cleaqring houses and social platforms- (from trade execution through clearing feedback settlement and vice versa) (see Figure 2). Institutions are now able to better manage operational, systemic and global market systemic risk control. 
Figure 2: Proposed Workflow, Fully-automated on Tradeweb (example)

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