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Buyside Forced to Avoid Central Counterparty Regulatory Gridlock 

February 12, 2015

Gregg Worth, Traders Magazine

The ongoing dispute between regulators in the U.S. and the European Union (EU) continues to hobble clearing operations in the over-the-counter (OTC) derivatives market, forcing buyside firms to look for a way around the gridlock and increasing concentration levels among remaining central counterparties (CCPs).

Worse yet, as market participants look for a way to continue using the OTC derivatives market, some buysiders are opting to go with non-cleared or "bespoke" derivative securities, while some clearing entities are exiting the business altogether. This exit of CCPs and other clearing firms is forcing the remaining clearinghouses to pick up the volume, said several market observers. They contend that this has made the market much riskier overall.

Read More: Traders Magazine 

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