US outlines regulation for over-the-counter derivatives

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The US Treasury called on Congress on May 12 to amend the Commodities Exchange Act (CEA) to compel clearing of all standardised over-the-counter derivatives through regulated central counterparties (CCPs). In a letter to Senate majority leader Harry Reid, Treasury secretary Timothy Geithner wrote that financial regulators will need to take steps to ensure CCPs impose robust margin requirements, as well as ensure "customised OTC derivatives are not used solely as a means to avoid using a CCP".