Contributor: Jennifer Hanes

As the on over-the-counter derivatives video points out, at $700 trillion the notional value of the global OTC derivatives market is ten times the size of global GDP, generating an estimated 20 million back office events annually. The majority of these transactions are bilateral, and only a fraction clear through exchanges today. However, with pending regulation forcing more of these transactions onto exchanges, market participants and industry analysts estimate that over the next few years anywhere from 45% to 80% of these transactions will be cleared through exchanges. That’s a pretty significant shift, and one that will require major operational changes for both the buy and sell side. Today, CME, ICE Trust and LCH.Clearnet are clearing ever larger volumes of interest rate and credit default swaps, and that is only expected to increase.... read more