More guidance needed from regulators on clearing

Clear guidance?

Chris Perkins

The mandatory central clearing of standardised over-the-counter derivatives, as required by the Dodd-Frank Act, will result in enhanced transparency and mitigation of systemic risk – if properly implemented. To achieve these goals, global regulators must introduce standards for derivatives clearing organisations (DCOs) to ensure an appropriate relationship is in place between initial margin, the default fund and DCO contributions to the risk waterfall.

To achieve balance in these elements, regul