New US Anti Crisis Derivatives Rules No Hit in Asia

U.S. regulators are pushing to move much of the $693 trillion over-the-counter derivatives market to new electronic platforms known as Swap Execution Facilities (SEF), which will increase transparency and help prevent the recurrence of the 2008 crisis. The SEFs started trading on Oct 2.

But dealers estimate only 10 to 20 percent of Asia’s daily market turnover in currency and interest rate derivatives – estimated by derivatives traders in the region at about $20 billion – has moved to the SEFs with the rest being settled in the wider market or bilaterally. The fragmentation of liquidity has made it difficult for investors to hedge portfolio risk, especially for large trades.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza