Actual Cleared Volumes vs. Mandated Cleared Volumes: Analyzing the US Derivatives Market

Encouraging the clearing of standardized derivatives has been a major priority for policy-makers. This has primarily been pursued through the implementation of clearing mandates, but other incentives also exist – netting and capital benefits, and the rollout of margining requirements for non-cleared derivatives, for example. As a result, the majority of interest rate derivatives (IRD) traded notional is now cleared.

This paper analyzes the volume of cleared derivatives to determine the impact of these incentives. In particular, the paper compares cleared notional amounts of over-the-counter (OTC) derivatives with the amounts subject to the US Commodity Futures Trading Commission (CFTC) clearing mandate. The results show that market participants clear more transactions than required under the CFTC’s clearing mandate.

Documents (1) for Actual Cleared Volumes vs. Mandated Cleared Volumes: Analyzing the US Derivatives Market

FRTB Impact on Correlation Trading

The capitalization of the correlation trading portfolio (CTP) under the Fundamental Review of the Trading Book will have an adverse economic impact for users of these instruments. In particular, there is a lack of clarity and consistency in the application...

A Path to Greater CFTC-SEC Alignment

Earlier this week, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) held a roundtable on regulatory harmonization – an initiative we wholeheartedly support. The US regulatory framework has evolved over time to facilitate financial markets...