Swap Futures Special Report

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Rewriting the Rule Book

The effects of the financial crisis of 2007-2008 are still being felt, particularly due to the colossal overhaul of global financial markets regulation that is now happening as a result. Even though the legislative process began nearly five years ago in some regions, many financial market participants continue to wonder what lies in store for their businesses under these new regulatory regimes. Of course, clarity has improved as the rules have been released, but questions and concerns remain about how the dust will settle once these regulatory structures are firmly in place.

What new products and services are likely to be needed, and who will satisfy this demand? How will new structures such as swap execution facilities (SEFs) and swap data repositories (SDRs) affect market operations? Will global cooperation on compliance produce results or simply result in more regulatory headaches? Can firms' technology infrastructure produce the results needed to satisfy new data reporting requirements? Can regulators collect, manage, and understand this data to gain consistent oversight of the global over-the-counter (OTC) derivatives sector? Market participants are asking these questions, and more, as they work toward full compliance with the variety of new regulatory regimes under construction around the world.

This special report examines these current issues, as well as potential future trends in the OTC derivatives space, in light of the ongoing push to implement financial regulation throughout the global financial markets. On page seven, a virtual roundtable of industry experts discusses the development of swap futures-a product that may become a lot more useful for market participants under the new rules. The article gauges the participants' opinions on current offerings in the market and assesses the future for this type of contract. Starting on page four, a feature examines the outlook for the full implementation of OTC derivatives regulation from the perspective of the financial firms that are being regulated. Using a recently published white paper on this topic (also sponsored by Equinix), the feature outlines end-user opinions on key issues including data repositories, global regulatory co-operation, and the use of swap execution facilities. Finally, Barry Smith, managing director, global capital markets at Equinix, writes about the issue of data repositories on page three. Given the complexity of current data reporting requirements, he makes several interesting points about this key element of OTC derivatives regulation.  

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