Over the Counter (OTC) Research
Overview
The OTC financial markets represent a diverse group of participants
who trade diverse instruments outside the gambit of an exchange.
In Australia, the OTC market value by turnover is over twice as
large as the equities and futures markets combined. In 1997-98,
OTC market turnover was over $A24 trillion.
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Database for OTC Research
Objectives
- Improve the efficiency of the OTC markets
- Identify elements of the (Australian) industry (e.g. product
lines, settlement) to serve as the basis for regional financial
leadership
- Identify the inherent risks of trading in the OTC markets to
assist market participants and the development of policy initiatives
 Current
& Future Research Programmes
- Benchmark the performance of the wholesale banking market as
a means of establishing best practice
- The impact of the domestic/international market mix on the competitive
nature of the industry
- The relationship between the OTC and underlying markets (e.g.
debt markets)
Impact on Industry
For the first time, OTC market participants will be able to assess
their relative efficiency in execution, settlement and control of
market transactions because of the program's benchmark work. Standardised
costs, processing steps and error rates of OTC transactions have
been developed.
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Paper
The size and structure of Australia's financial markets and its
position within the region has been analysed with trends identified.
This information was included in the submissions of industry bodies
representing the sectors of the financial services industry, to
the Wallis Committee.
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Paper
Partnerships
The Australian
Financial Market Association (AFMA) is a core sponsor of the
research program. AFMA is the national body representing organisations
that participate in the OTC wholesale financial markets.
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