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October 17, 2018

Structured trade review: Benchmarking study

Mitigating systemic and non-systemic risks

Executive summary


The surge in derivatives trading worldwide paved the way for rapid expansion of the over-the-counter (OTC) market for them. Today, OTCs account for almost 80% of the global financial market, with the notional amount outstanding at ~$532 trillion as of December 2017.


OTCs are non-regulated and opaque, with its set of risks and rewards. Reasons why structured trade review (STR) has emerged as an independent and robust mechanism to combat the risks through close vigilance and controls. This control function works in conjunction with the middle office, product control, front office and back office. The process covers the entire lifecycle of a trade from inception to maturity or termination.


This study highlights the following:

  • The STR process, and the benefits of implementing it as a control function
  • A look at how STR is reshaping itself imbibing some of the technological advancements such as robotic process automation and Blockchain
  • A benchmarking study on STR practices across leading investment banks