The Asia-Pacific (APAC) region is undergoing a transformation in its financial markets—and OTC derivatives are at the heart of it. Parameta Solutions’ latest OTC market report takes a deep dive into the APAC region, and the trends that are shaping the market.
US Firms Are Expanding East
The report reveals that 74% of US-based respondents are expanding their OTC operations in Asia. With APAC’s growing institutional and retail investor base, multinational corporations are seeking customised financial solutions—and US firms are well-positioned to deliver.
Liquidity and Volatility: A Mixed Picture
Liquidity in APAC has grown significantly, especially in financial hubs like Singapore, Hong Kong, Tokyo, and Sydney. However, emerging markets such as Indonesia and Vietnam still face challenges due to smaller market sizes and limited infrastructure.
Interestingly, APAC respondents expressed less concern about volatility than their global peers. While volatility can be disruptive, it also creates opportunities for execution and risk management.
Regulation Is Evolving—But Gaps Remain
Regulatory reform is underway across APAC. Jurisdictions like Australia, Hong Kong, and Singapore have implemented trade reporting requirements to improve transparency. Japan’s Financial Services Agency (JFSA) rewrite is streamlining compliance and aligning with global standards.
Still, 85% of respondents say they would welcome further reform to make trading easier in Asia. The need for harmonised rules, better surveillance, and improved liquidity management remains a priority.
Technology and Talent Are Driving Growth
Technology—especially AI—is playing a pivotal role in transforming the OTC derivatives market. 91% of APAC respondents are using AI models in trading, and confidence in the data supporting these models is high.
Talent is also on the rise, with 52% of respondents saying there is sufficient human resource in the region. However, upskilling junior talent remains essential to meet the demands of complex OTC environments.
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