OTC standardisation reaching its limit

Author: | Published: 4 Mar 2011

As regulators release increasingly specific requirements for trading derivatives under the Dodd-Frank Act, structured finance attorneys see the agencies approaching the limits of what can reasonably be standardised.

The pressure to move all trading through central clearinghouses and exchanges has some industry participants worried that the over-the-counter (OTC) swap market will be ultimately shuttered.

Last month the Commodity Futures Trading Commission (CFTC) proposed rules regarding swap trading relationship documents. The proposal advocates standardised documentation such as the International Swaps and Derivatives Association master agreements, as well as enforceable...