Futurisation of Swaps & OTC Market Regulation with MIFIR and MIFID II


Term Paper, 2018

11 Pages, Grade: 1,0


Abstract or Introduction

The necessity of increased stabilisation and regulation of financial markets, especially over-the-counter markets, has received increased international attention following the financial crisis of 2007-08.1 Previously, swap markets were largely ‘in the dark’ when compared to exchange traded derivatives. The reactionary regulation, the Dodd-Frank Act, has severely tightened the OTC swaps markets through standardisation, increased collateral requirements and reporting standards and a more refined clearing mandate; to continue our analogy, it has sought to bring the swaps market into the light. Due to this increased regulation and subsequent increased costs associated with trading swaps, large swathes of swap trading migrated onto futures exchanges, in a process known as swap futurisation. This offered market participants regulatory certainty as well as a reduction in some of the more onerous costs and requirements under the Dodd-Frank Act. With eight years of trading under the Dodd-Frank regulation, our investigation into the advantages and disadvantages of swap futurisation will focus on trends seen in American data. Following on we will look more closely at the European Union’s response, namely the Markets in Financial Instruments Directive II and the Markets in Financial Instruments Regulation.

Details

Title
Futurisation of Swaps & OTC Market Regulation with MIFIR and MIFID II
College
University of Strathclyde  (Business School)
Course
Derivatives and Treasury Management
Grade
1,0
Author
Year
2018
Pages
11
Catalog Number
V437647
ISBN (eBook)
9783668776579
ISBN (Book)
9783668776586
Language
English
Keywords
Swaps, Futurisation of Swaps, Futures, Financial Instruments, OTC, over the counter, financial regulation, OTC regulation, MIFIR, MIFID II, MIFID, Dodd-Frank, clearing, Dark trading
Quote paper
Sabrina Schleimer (Author), 2018, Futurisation of Swaps & OTC Market Regulation with MIFIR and MIFID II, Munich, GRIN Verlag, https://www.grin.com/document/437647

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