This whitepaper examines how structural change in the OTC derivatives market will affect the way financial and non-financial firms operate and highlights the need for firms to consider how they will navigate the evolving regulatory landscape and fast-moving OTC derivatives market.
Report highlights include:
- The OTC derivatives market will become more transparent, liquid and simpler, as the majority of OTC derivatives contracts will be standardized and cleared via Central Counterparties (CCPs).
- The OTC derivatives market will operate under a new infrastructure. Standardized OTC derivative trades will be executed on electronic platforms and reported to central repositories.
- Non-standardized OTC derivatives trades will be more capital and margin intensive. Bespoke OTC derivatives will be less preferable than standardized ones, but they will likely continue to be used by market participants for specific hedging purposes.