The new cost of trading
Far reaching reform of the OTC derivatives markets is taking shape in Europe under the European Markets Infrastructure Regulation (EMIR). We expect the price for this regulation to be an additional total annual cost of €15.5 billion for the OTC derivatives market in the EU.
About this paper
Over-the-counter (OTC) derivative markets have been subject to significant change as global regulatory commitments become increasingly a reality.
The clearing obligation, new margin requirements, new capital charges for OTC derivative exposures, reporting and other compliance requirements aim at making the market less risky and more transparent, but will increase the costs of OTC derivative transactions.
This paper from Deloitte’s EMEA Centre for Regulatory Strategy explores how much more expensive cleared and non-cleared OTC derivative transactions will become as a result of the reform package in the EU, how the structure of OTC derivative markets is set to change and what strategic challenges arise for firms.