Report on the Australian OTC Derivatives Market List of figures
Australian Prudential Regulation Authority
Australian Securities and Investments Commission
Reserve Bank of Australia
October 2012
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Figure 1: Life Cycle of an OTC Derivatives Contract
Description for Image
Figure 1: Life Cycle of an OTC Derivatives Contract
This figure illustrates the range of processing events that may apply to an OTC derivatives contract from the time it is initiated to when all contractual obligations are completed. Pre-trade events include the establishment of legal documentation and counterparty due diligence. Soon after trade execution, trade information could be captured or confirmed by electronic systems. Depending on the duration of the contract and whether it forms part of a larger portfolio of derivatives, other post-trade events may also occur, such as portfolio reconciliation, portfolio compression, collateral management, or it could be cleared through a central counterparty. These might occur repeatedly until all obligations under the contract have been settled and expired.
[End description.]