Clearing and Counterparty Regulations Pose Technology Conundrum

clearing capital to increase
The introduction of SEFs and OTFs, as well as clearing requirements, will change technological considerations in the swaps market.

Contentious regulation in Europe and the US will soon require standardized swaps to be cleared through central counterparties, and executed on designated platforms such as organized trading facilities (OTFs) and swap execution facilities (SEFs). With this development, the industry is facing a stark choice about its technological strategy and questioning the wisdom of forcing these instruments to be traded in an on-exchange environment. By James Rundle.

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