Deutsches Risk survey 2014: Regulatory costs drive market dynamics

While mandatory clearing is not set to come into force for European financial counterparties until mid-2016 and the uncleared margin rules are still at consultation stage, some German derivatives users are already considering how to alter their risk management strategies in light of the incoming rules, as Deutsches Risk’s 2014 survey has found.

More than one-fifth of respondents to the Deutsches Risk 2014 survey, which include banks, asset managers, hedge funds, insurance companies and non-financial corporates, say that the incoming rules will change the way they operate, while nearly two thirds state that clearing will increase their cost of doing derivatives trades by up to 5%.

Of the respondents that say they are changing the way they operate, 34% say they will rely more on traditional futures products. While they may not be as