SunGard's Daniel Parker on the trading opportunities presented by the Dodd-Frank Act.
The Dodd-Frank Wall Street Reform Act (the "DFA") requires
agencies to promulgate hundreds of new rules. With the
promulgation of these new rules, which generally require
additional or different automation processes, come marketplace
opportunities, including trading advantages that are often
overlooked by those participants scrambling exclusively for DFA
compliance. This obscure rule change could lead to
opportunities concerning the lifeblood of trading –
A primary goal of the DFA was to increase transparency in
the formerly opaque swaps market. The Commodities Futures
Trading Commission ("CFTC") issued a final rule imposing
real-time reporting of transaction and pricing data and public
dissemination requirements on registrants and registered
entities for all publically reportable swaps. Therefore, any
arm's-length transaction between two parties that results in a
corresponding change in the market risk qualifies as a
publically reportable swap.
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