With regulation looming for Hedge Funds trading in the OTC market, Kathryn Tully looks at the future of the clearing and derivatives markets, and the effect this regulation may have on trading strategies for Hedge Funds.
Facing the general consensus that Hedge Funds will inevitably incur increased operating costs from the introduction of Dodd-Frank, GreySpark is of the opinion that in reality the impact may be minimal, with costs remaining either at current levels or rising by less than 1 percent.
To put that in perspective, GreySpark’s recent report on the OTC landscape revealed that operational costs for the wider community having to clear derivatives could increase by as much as 3 percent with Dodd-Frank.
Anna Pajor, Senior Consultant, Team Leader of Capital Markets Intelligence practice, GreySpark, points out the major differences in clearing charges in the EU compared to the US, stating that this can be up to ten times more in the former.
The article goes onto look at the impact of other regulations to the landscape, such as EMIR.