Profile | Hans-Ole Jochumsen
A new exchange tapestry
Hans-Ole Jochumsen, executive vice president of Transaction Services Nordics for the NASDAQ OMX Group, president of the Federation of European Securities Exchanges (FESE) and president of NASDAQ OMX Nordic discusses how the group is meeting new challenges.
How do you deal with the onslaught of regulation?
I think it is difficult to find another historical period where there has been so much change in regulation and one that will have such an impact on the financial services industry. It is not only about EMIR (European Market Infrastructure Regulation) but also MIFID II, the Market Abuse Directive and the Financial Transaction Tax. We try to influence the outcome and last year we opened an office in Brussels because we realised we needed to work with the Commission, the Parliament and the Committee on Economic and Monetary Affairs (ECON) on so many different levels. Also, as president of the Federation of European Securities Exchanges I follow all the developments very closely.
You have noted there are both challenges and opportunities. What are they? We have upgraded our technology and risk management systems and have just introduced a collateral management service. In the past, we outsourced the function but in order to be EMIR compliant we need to handle this function in-house. Last year we moved the clearing business to a single facility based in Stockholm because the industry is about scale and we want to leverage our technology across all facilities. In line with
Best Execution | Spring 2013
EMIR we’ve also changed the structure and have implemented a member-financed default fund for the first time. We also have to create a separate legal entity for our clearing house with independent directors and an independent risk committee. Our stated ambition is to become a leading
player, providing trading and clearing across multiple asset classes such as equity derivatives, commodities as well as Nordic products in fixed income, especially interest rate swaps. We are already clearing Swedish interest swaps. The volume is limited at the moment because we are in the middle of managing the process with clients. I think there will be a gradual increase in volumes and our plan is to expand the product scope to, for example, include basic swaps and overnight index swaps denominated in Swedish krona. Later in 2013 we also plan to clear interest rate swaps and related derivatives denominated in Danish kroner, Norwegian krone and euro. The deadline for mandatory clearing may still be unclear but we are ready and prepared.
What plans do you have for other asset classes such as equity derivatives? What we’ve seen since MiFID is increased competition in cash equities, and we believe the next wave of competition will be in derivatives. Our
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