By Chris McMahon As a result of the proposed mandate to centrally clear standardized over-the-counter contracts, market participants are seeking new technology that makes matching and clearing trades faster and easier. Proposed regulatory changes in the over-the counter (OTC) derivatives markets may create new challenges for large financial institutions. Many OTC market participants have front- and middle-office systems that are built for the bi-lateral trading in the cash markets. Many of these systems cannot centrally clear OTC positions where the counterparty is always the exchange. Where a centrally cleared position is marked to market daily - and in most cases the profit and loss of a position is booked daily - an OTC position's profit and loss is typically only booked at expiration. << Read the story at CMEGroup.com >>
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