Tag Archives: clear

Share your views : Should Standardised OTC Derivatives Trading Be Mandated to Clear Through CCPs?

Share your views : Should Standardised OTC Derivatives Trading Be Mandated to Clear Through CCPs?

 

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Transparency creates opportunity in an already strained lit world, markets could use an injection of new flow

 

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Hell yes! The Central Clearing Party should be well regulated and have ample funding. Only real danger here is the “single point of failure” the CCP itself becomes. Don’t put all the eggs in one basket. CCPs should be user owned, user governed, not-for-profit, priced at cost, infrastructure providers that operate under substantial government regulation and oversight. Every participant should have a painfully large slug of capital invested on a “will call” as needed basis. I’m thinking direct ability to suck assets right out of the firm’s deposit accounts on a moments notice. Any firm gets in trouble at a CCP and the entire group is in prorata at jeopardy. All operations and computer systems distributed with the most robust anti terrorism design. Every participant pledges its life to make the clearing function actually clear, and after that full faith and resources of the government to bail it out and make good from there. Consider having two CCPs for each product cluster. Each with sufficient IT and operations resource to carry the full load. Pay 20% more than rock bottom full cost (with overhead). Use that extra 20% for extra safety, redundancy, auditing, etc. The entire thing needs to be bullet proof and totally above reproach.

 

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Thanks for sharing your views. Here is a link to the Opinion poll on our website. Will appreciate if you participate in the poll and share your views. Thanks in advance.

http://www.asiaetrading.com/opinion-polls/should-standardised-otc-derivatives-trading-be-mandated-to-clear-through-ccps/

1 day ago• Like

 

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shouldn’t capital required be a function of risk rather than a blanket capital requirement? And, if the government is backing it won’t participants be inclined to take more risk? Just my 2 sense.

 

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Here is a view from a “plumber”. Have not given it a whole lot of thought but here goes. Set up the CCP’s by product cluster, at least two per cluster, each with a max 50% share of market, each capable of carrying 100% of the load in a pinch. Let OFR / FRB / FSOC be the regulator in the U.S.

I’ve always admired how payroll taxes in the U.S. are deposited at banks and swept efficiently to the Treasury with no recourse – a bad check for example still gets swept, sorry no refunds! Use the same concept here, each trading entity deposits into a special account. They are able trade but can’t withdraw funds. Each account is valued each night (with provisions for day trading risk limiting). Everything past cash and highly marketable treasury securities get a an appropriate haircut for valuation. No complex assets are allowed in the accounts. If there is even a hint of trouble” they sweep those assets right out of the accounts and collect them at the Treasury on behalf of the CCP to fund pro rata any trouble.

The CCPs are at cost entities, no profit, run as an industry utility. They set the minimum value for each trading entity in its group – based on risk – with the final total amount of all deposits approved and blessed by the government oversight group. CCP requires and reviews the “Living Will” each member must annually file, again with oversight and auditing from the government. Transaction fees fund the CCP. Between the variable deposits, and the per transaction fees (based on volume) the “safety costs” line up fairy well with the systemic risk imposed.

The idea is to defease the full cost of systemic risk mitigation right back onto the industry itself. Government only steps in on a six sigma plus event that no one could possibly have envisioned. Prior to any taxpayer bail out, all firms in the industry, not just the failing one, take an immediate, painfully large hit.

Do not consolidate all the risk into too few CCPs. Frankly, I worry if DTCC may itself at some point be too big, and too much of a central point of failure. Pay the price and have clearing spread around geographically, technically, operationally and financially.

Have North America, EMEA, and Asia each “re-insure” each other, before any government, in any of those regions, do a bail out. Even then its at minimal cost to put the industry back into shape. The last thing we want is for the government to become the market maker of last resort and become direct owners of huge pools of complex assets.

Mandatory term limits on CCP heads and the government oversight regulators. No need to make any of those positions too cozy or incestuous. Staggered vacancies. Keep the whole thing clean. 100% transparent operations with ample granular level sunshine disclosure of all operations to the public.

BTW, with the new LEIs and perhaps two new years into this it should be child’s play to choke off any trader who has filed for bankruptcy or reorg. Just shut off those LEIs intra day (i.e. the LEI registrar database simply broadcasts “this LEI is now suspended” to all subscribers. All trades with that party then cease. CCP then makes a very current assessment “do we need to draw in centrally any of the assets from our deposit accounts to mop up?”

There is no perfect solution. Increasing regulation will undoubtedly translate to a higher cost of doing business. The entire system here however might actually be a nice boost for the industry.

In the “old days” you had Beta exposure (direct correlation to the immediate trading market), Alpha (firm or credit specific factors) and Residual Risk. Now days we add an additional negative factor – exposure to the overall financial system systemic risk. With better regulation, and more fungible (and better understood) products that Systemic risk factor exposure goes dramatically down. The entire market expected return grows. That’s the type of thing the entire industry could totally celebrate!

 

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Seems that you want to penalize the HFT players with transaction based fees. The risk they pose to the market is measured in microseconds. Wouldn’t a risk based fee make more sense. I make one trade per year but the risk on the trade is enormous but pay less than low latency arb strategist? Some of the other items sound interesting and are worthy points

 

 

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Know both Linux or Unix top command and ps command to clear Bloomberg interview question

Know both Linux or Unix top command and ps command to clear Bloomberg interview question

This is for questions on how to diagnose for memory leaks or run away processes

top
Process viewer, find the CPU-intensive programs currently running. See ps for explanations of the field descriptors.
Syntax
top options

Options
-b Run in batch mode; don’t accept command-line input.
Useful for sending output to another command or to a file.
-c Show command line in display instead of just command name.
-d delay
Specify delay between refreshes.
-i Suppress display of idle and zombie processes.
-n num
Update display num times, then exit.
-p pid
Monitor only processes with the specified process ID.
-q Refresh without any delay.
If user is privileged, run with highest priority.
-s Secure mode. Disable some (dangerous) interactive commands.
-S Cumulative mode. Print total CPU time of each process,
including dead child processes.

Interactive commands

space Update display immediately.
A Sort by age, with newest first.
c Toggle display of command name or full command line.
f, F Add fields to display or remove fields from the display.
h, ? Display help about commands and the status of secure and cumulative modes.
k Prompt for process ID to kill and signal to send (default is 15) to kill it.
i Toggle suppression of idle and zombie processes.
l Toggle display of load average and uptime information.
^L Redraw screen.
m Toggle display of memory information.
M Sort tasks by resident memory usage.
n, # Prompt for number of processes to show.
If 0 is entered, show as many as will fit on the screen
(default).
N Sort numerically by process ID.
o, O Change order of displayed fields.
P Sort tasks by CPU usage (default).
q Exit.
r Apply renice to a process. Prompt for PID and renice value. Suppressed in secure mode.
s Change delay between refreshes.
Prompt for new delay time, which should be in seconds.
(Suppressed in secure mode.)
S Toggle cumulative mode. (See the -S option.)
t Toggle display of processes and CPU states information.
T Sort tasks by time/cumulative time.
W Write current setup to ~/.toprc. This is the recommended way to write a top configuration file.
Top displays per-process CPU usage (not total server load) it is useful for seeing how much work the machine is doing now compared to some point in the past.
At the top of the display output there are three numbers representing the number of processes waiting for the CPU now, an average for the past five minutes, and an average for the past fifteen minutes. These three numbers are the “load average”
Top should only be used to compare the load average on two different machines if they have an identical configuration (both hardware and software.)
ps
Process status, information about processes running in memory. If you want a repetitive update of this status, use top.
Syntax

ps option(s)
ps [-L]

Options
-L List all the keyword options
This version of ps accepts 3 kinds of option:

-Unix98 options may be grouped and must be preceeded by a dash.
BSD options may be grouped and must not be used with a dash.
–GNU long options are preceeded by two dashes.

Options of different types may be freely mixed. The PS_PERSONALITY environment variable provides more detailed control of ps behavior.

The Options below are listed side-by-side (unless there are differences).
Simple Process Selection:
-A a select all processes (including those of other users)
-a select all with a tty except session leaders
-d select all, but omit session leaders
-e select all processes
g really all, even group leaders (does nothing w/o SunOS settings)
-N negate selection
r restrict output to running processes
T select all processes on this terminal
x select processes without controlling ttys
–deselect negate selection

Process Selection by List:

-C select by command name
-G select by RGID (supports names)
-g select by session leader OR by group name
–Group select by real group name or ID
–group select by effective group name or ID
-p p –pid select by process ID (PID)
-s –sid select by session ID
-t –tty select by terminal (tty)
-u U select by effective user ID (supports names)
-U select by RUID (supports names)
–User select by real user name or ID
–user select by effective user name or ID

-123 implied –sid
123 implied –pid

Output Format Control:

-c Different scheduler info for -l option
-f Full listing
-j j Jobs format
-l l Long format
-O O Add the information associated with the space or comma separated
list of keywords specified, after the process ID, in the default
information display.

-o o Display information associated with the space or comma separated
list of keywords specified.
–format user-defined format
s display signal format
u display user-oriented format
v display virtual memory format
X old Linux i386 register format
-y do not show flags; show rss in place of addr

Output Modifiers:
C use raw CPU time for %CPU instead of decaying average
c true command name
e show environment after the command
f ASCII-art process hierarchy (forest)
-H show process hierarchy (forest)
h do not print header lines (repeat header lines in BSD personality)
-m m show all threads
-n set namelist file
n numeric output for WCHAN and USER
N specify namelist file
O sorting order (overloaded)
S include some dead child process data (as a sum with the parent)
-w w wide output
–cols set screen width
–columns set screen width
–forest ASCII art process tree
–html HTML escaped output
–headers repeat header lines
–no-headers print no header line at all
–lines set screen height
–nul unjustified output with NULs
–null unjustified output with NULs
–rows set screen height
–sort specify sorting order
–width set screen width
–zero unjustified output with NULs

Information:
-V V print version
L list all format specifiers
–help print help message
–info print debugging info
–version print version

Obsolete:
A increase the argument space (DecUnix)
M use alternate core (try -n or N instead)
W get swap info from … not /dev/drum (try -n or N instead)
k use /vmcore as c-dumpfile (try -n or N instead)
NOTES
The “-g” option can select by session leader OR by group name. Selection by session leader is specified by many standards, but selection by group is the logical behavior that several other operating systems use. This ps will select by session leader when the list is completely numeric (as sessions are). Group ID numbers will work only when some group names are also specified.

The “m” option should not be used. Use “-m” or “-o” with a list. (“m” displays memory info, shows threads, or sorts by memory use)

The “h” option varies between BSD personality and Linux usage (not printing the header) Regardless of the current personality, you can use the long options –headers and –no-headers

Terminals (ttys, or screens of text output) can be specified in several forms: /dev/ttyS1, ttyS1, S1. Obsolete “ps t” (your own terminal) and “ps t?” (processes without a terminal) syntax is supported, but modern options (“T”,”-t” with list, “x”, “t” with list) should be used instead.

The BSD “O” option can act like “-O” (user-defined output format with some common fields predefined) or can be used to specify sort order. Heuristics are used to determine the behavior of this option. To ensure that the desired behavior is obtained, specify the other option (sorting or formatting) in some other way.

For sorting, BSD “O” option syntax is O[+|-]k1[,[+|-]k2[,…]] Order the process listing according to the multilevel sort specified by the sequence of short keys from SORT KEYS, k1, k2, … The `+’ is quite optional, merely re-iterating the default direction on a key. `-‘ reverses direction only on the key it precedes.
The O option must be the last option in a single command argument, but specifications in successive arguments are catenated.

GNU sorting syntax is –sortX[+|-]key[,[+|-]key[,…]]
Choose a multi-letter key from the SORT KEYS section. X may be any convenient separator character. To be GNU-ish use `=’. The `+’ is really optional since default direction is increasing numerical or lexicographic order. For example, ps jax –sort=uid,-ppid,+pid

This ps works by reading the virtual files in /proc. This ps does not need to be suid kmem or have any privileges to run. Do not give this ps any special permissions.

This ps needs access to a namelist file for proper WCHAN display. The namelist file must match the current Linux kernel exactly for correct output.

To produce the WCHAN field, ps needs to read the System.map file created when the kernel is compiled. The search path is:
$PS_SYSTEM_MAP
/boot/System.map-`uname -r`
/boot/System.map
/lib/modules/`uname -r`/System.map
/usr/src/linux/System.map
/System.map
The member used_math of task_struct is not shown, since crt0.s checks to see if math is present. This causes the math flag to be set for all processes, and so it is Programs swapped out to disk will be shown without command line arguments, and unless the c option is given, in brackets.

%CPU shows the cputime/realtime percentage. It will not add up to 100% unless you are lucky. It is time used divided by the time the process has been running.

The SIZE and RSS fields don’t count the page tables and the task_struct of a proc; this is at least 12k of memory that is always resident. SIZE is the virtual size of the proc (code+data+stack).

Processes marked are dead processes (so-called”zombies”) that remain because their parent has not destroyed them properly. These processes will be destroyed by init(8) if the parent process exits.
PROCESS FLAGS
ALIGNWARN 001 print alignment warning msgs
STARTING 002 being created
EXITING 004 getting shut down
PTRACED 010 set if ptrace (0) has been called
TRACESYS 020 tracing system calls
FORKNOEXEC 040 forked but didn’t exec
SUPERPRIV 100 used super-user privileges
DUMPCORE 200 dumped core
SIGNALED 400 killed by a signal

PROCESS STATE CODES
D uninterruptible sleep (usually IO)
R runnable (on run queue)
S sleeping
T traced or stopped
Z a defunct (“zombie”) process

For BSD formats and when the “stat” keyword is used,
additional letters may be displayed:
W has no resident pages
< high-priority process N low-priority task L has pages locked into memory (for real-time and custom IO) ENVIRONMENT VARIABLES and PERSONALITY (posix,linux,bsd,sun) Examples: List every process on the system using standard syntax: ps -e List every process on the system using BSD syntax: ps ax List the top 10 CPU users. ps -e -o pcpu -o pid -o user -o args | sort -k 1 | tail -21r List every process except those running as root (real & effective ID) ps -U root -u root -N List every process with a user-defined format: ps -eo pid,tt,user,fname,tmout,f,wchan Odd display with AIX field descriptors: ps -o "%u : %U : %p : %a" Print only the process IDs of syslogd: ps -C syslogd -o pid= When displaying multiple fields, part of the output may be truncated, to avoid this supply a width to the arguments: ps -e -o user:20,args. Since ps cannot run faster than the system and is run as any other scheduled process, the informa

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