OTC Cleared Contract Life Cycle

The introduction of the Dodd-Frank Act and similar reforms across the world has changed the OTC markets. The new OTC market structure and new regulations were discussed in Chapter 9. As a result of these reforms, standardized cleared OTC contracts have been introduced. Today, cleared instruments are traded that have been derived from various OTC products, such as interest rate swaps, basis swaps, currency swaps, foreign exchange swaps, total return swaps, equity swaps, equity index swaps, debt and debt index swaps, credit default swaps, and other commodity swaps. Although the cleared contract market is still a relatively new market and there is trading of a limited variety of types of contracts, the cleared contract market is expected to introduce a larger variety of instruments and trade higher volumes. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.