OTC Derivatives ReformSponsored by MarketAxess
Dodd-Frank: It's Coming and It's Costly
16 March 2011:
Let's face it, there's no escaping Dodd-Frank. Steve Jarrett, CEO of Worldflow, talks about three big areas of D-F-related change: the push-out provision, SEFs and central clearing.
For more videos in the OTC Derivatives Reform Spotlight Series click here.
Related Videos
Rate This VideoYour Rating
Login to rate.
|
Community Rating
|
Comments | Post a Comment
2 Comments to "Dodd-Frank: It's Coming and It's Costly":
louislovas
16 March 2011
Recent news out from Republican Congress... it has them looking to alter a few of the Dodd-Frank provisions. One of which is mentioned in this video - Centralized Clearing. The news comment reads: "One of the Republican bills would amend Dodd-Frank in a way that would shield end-users of OTC derivatives from new central clearing requirements and the costs involved." I'm sure there is a lot of detail behind this simple statement to 'shield' end-users.
Comments (29)
stevejarrett
18 March 2011
Shielding end-users from the costs of clearing would make some sense, and what this means is probably finding a way for the "market participants" to fund the cost of margin / collateral, without passing the costs on. As the law presently stands both parties have to pledge collateral. At a guess it would have to be like the futures markets, where the margin is only placed with the clearer by the market maker, and so if there is an unwind, the funds pledged across the market are used to unwind the position. This avoids putting cost with the end-user per se. Just moves the cost from the buy-side to the sell-side. But does at least protect the buy-side from increased costs for hedging and having to pass that onto the end-users in fees.
Comments (2)