Regulators look out for clearing dodges

Regulators fear derivatives could be structured to make them unclearable – and there is anecdotal evidence to suggest escape routes have been explored. But market participants say there is no incentive to avoid the new regime. Joe Rennison reports

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Rules requiring the use of clearing houses in over-the-counter derivatives markets are still being finalised, but regulators are already worried market participants are trying to find a way out. A February 29 report by the technical committee of the International Organization of Securities Commissions (Iosco), repeatedly warns regulators to look out for products designed to be unclearable. The most likely perpetrators – banks, large corporates and some financial end-users – profess their

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