Interest rate derivatives represent the fastest growing and largest asset class in the sector and, as moves to push trading onto exchanges gather pace, innovative new contracts and exchanges are launching to meet the anticipated demand.
Since the Dodd-Frank act was passed last year, new initiatives
are being introduced to meet the legislated move from OTC to
exchange traded contracts.
The interest rate swap market in particular has
been a focus for innovation with a raft of new launches as the
market anticipates a move towards central clearing and an
increase in trading on organised trading facilities.
The decision last month by the CFTC and SEC to
delay the introduction of new rules relating to interest rate
swaps until December was met with relief by many in the
industry who feared that US regulators would prioritise time
over substance with their rulemaking.
However, when the CFTC and SEC finally pass down
rules and definitions regarding the regulation of the interest
rate swaps market, the seeds being sown now will come to
fruition when the rules are introduced at the end of the
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