The Impact of Centralized Derivatives Clearing

A case for proactive collateral management

New rules brought in by The US Dodd-Frank Act now mandate that firms trading in OTC derivatives will be required to make larger margin commitments and be subject to more frequent margin calls.

With a more complex market structure and stricter rules, paying close attention to margin requirements is a must ( for firms looking to avoid posting more collateral than needed, missed trading opportunities and liquidating unnecessarily to cover margin calls).