Derivatives Data May Quadruple After Dodd-Frank Act

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According to recent study conducted by TABB group, new data-recording requirements under Dodd-Frank may increase derivatives data levels by as much as 400%.

The information to be stored in Swap Data Repositories includes data on electronic trading, clearing, and reporting.   As the result, record-keeping requirements will make the day of an OTC derivatives trader infinitely more complicated.

Some experts argue, that the data requirements are not overwhelming but compared to what the OTC derivatives areas are used to in the past, it is a drastic change from before.   Now not only traders needs to trade faster, but they need to consume a considerable amount more data to make those same decisions and calculations.

In response, firms will have to rely on complex technology and sensible organization of data to cope with the increased workload.    The report estimates that OTC derivatives market participants will spend $3.4 billion in order to ensure they comply with new rules.

The TABB group also predicts that the move to electronic platforms will bring speed to the relatively sluggish derivatives market.    In addition, there will be sizable decreases in latency.

Anna Timone (195 Posts)

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