Swaps vs futures: OTC market speaks out

Swap futures have been pitched as economically equivalent to over-the-counter swaps, but with a much lighter regulatory burden. But some over-the-counter participants claim the rules create an unfair and unjustified arbitrage opportunity. Joe Rennison reports

arbitrage

As a general rule, regulators hate loopholes. However, if some derivatives users are to be believed, they’ve gone and created a whopping great big one that allows exchanges to launch futures contracts that are economically identical to over-the-counter swaps, but attract a fraction of the margin. With more of these contracts likely to be rolled out, OTC participants have become increasingly vocal over the past few months – complaining they are being put at a competitive disadvantage by new

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here