The futurisation of swaps: what’s expected

Author: Zoe Thomas | Published: 15 Nov 2013

  • New regulations under Title VII of Dodd-Frank have increased the clearing time and margin for standardised covered swaps;
  • Given the blurred distinction between standardised swaps and futures, when possible futures are being used as an alternative to cleared swaps;
  • The gaps between standardised swaps, un- standardised swaps and futures are being used as a means to find liquidity and new opportunity in the market.

New rules under Title VII of the Dodd-Frank act have increased the regulatory burdens on swaps, leading some in the market to re-examine how the instrument is used.

The new regulations increased clearing times and margin requirements for standardised swaps. While, futures are already regulated by the Commodity Futures Trading Commission (CFTC) and have both shorter clearing times and lower margins.

The increased burden that...