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The purpose of this paper is to answer a specific research question: How have EU and US regulators translated the idea of central clearing into law?

A meticulous legal research is carried out. First, the pre‐crisis regulatory regime for credit default swap (CDS) is reviewed, from a securities law angle as well as from a comparative Euro‐American perspective. Next, the regulatory processes leading to the adoption of the central clearing regulations are discussed. Thereafter, a material comparative analysis is made of the provisions related to central clearing in the EU and US regulatory initiatives. Finally, the paper is concluded with an evaluation of both legislations in the light of all previous analyses.

The research first shows that central clearing regulations rely on a series of presumptions, both concerning the gravity of counterparty risk threats and the necessity of central clearing. Additionally, the EU and US clearing regulations are similar with regard to the broad innovations they introduce, i.e. the mandatory central clearing of a variety of over‐the‐counter derivatives and counterparty risk management requirements for central clearing institutions and for non‐cleared swaps. However, the specific content of the provisions often differs. Furthermore, both legislations are limited to enouncing broad principles. This is also the case for the crucial provisions related to counterparty risk management. Therefore, these provisions in se do not guarantee the proper regulation of counterparty risk management practices. Consequently, much is to be expected from the implementing measures adopted by regulatory institutions.

The paper provides an overview of those provisions in the European and US regulations that specifically concern central clearing for CDS. It is one of the first papers which does this in a very well‐structured and clearly written manner. Also it is one of the first to provide a clear comparison between the provisions in the EU and the US regulations.

Systemic risk propagated through over‐the‐counter (OTC) derivatives can best be managed by a public‐private central counterparty clearing house. The purpose of this paper is to outline the market microstructure necessary for such a clearing house.

The paper proposes using an request for quote platform with an active permissioning system that uses analytic approximations based on Monte Carlo simulation to estimate default risk and a two‐part pricing scheme to efficiently price that risk.

It is found that comprehensive clearing for complex and standardized derivatives is feasible using the clearing framework.

This research is limited by the authors' ability to give empirical examples. The paper gives a short example with data, but given the constraints on length, cannot go into more detail.

This comprehensive clearing structure, in contrast to current proposed government regulations, will not drive out the “good” with the “bad” OTC derivative instruments.

This is the only paper the authors are aware of that outlines a detailed framework for clearing all OTC derivatives.

This new act has substantially changed the legal landscape for the futures markets as well as the over‐the‐counter securities markets. The author explores this act with particular attention in the new provision allowing for the trading of futures on individual stocks.

The purpose of this paper is to explain the rule recently published by the US Commodity Futures Trading Commission that establishes a timetable for the mandatory clearing of interest rate and credit default swaps through a clearinghouse.

The paper discusses the structure of cleared trades in swaps, the classes of interest rate and credit default swaps that are subject to mandatory clearing under the CFTC's new rule and the affirmative and negative specifications for each class, the phased approach adopted by the CFTC for the mandatory clearing compliance schedule, and the end‐user and inter‐affiliate exemptions from the mandatory clearing requirement.

“Centralized clearing,” a process in which bilaterally negotiated trades of derivatives have to be given up to a centralized clearinghouse, is a cornerstone of the new global regulatory system for derivatives. Its proponents argue that centralized clearing will help to mitigate systemic risk by helping counterparties identify and net positions. The paper outlines the clearing rules in the USA for interest rate and credit default swaps.

The paper provides expert guidance from experienced financial services lawyers.

The purpose of this paper is to explain and analyze recent US Congressional, Obama Administration, and financial services industry initiatives to reform and regulate the market for OTC derivatives.

The paper outlines Congressional committee bills, other Obama Administration initiatives, and industry self‐regulatory initiatives and discusses underlying current issues such as which derivatives would and would not have to be cleared through central counterparties (CCPs); how standardized and customized derivatives would be distinguished from each other; potential margin, business conduct, reporting, and recordkeeping standards for OTC derivatives dealers; how fraud, market manipulation, and other market abuses would be policed; possible limitations on the types of parties that may participate in unregulated derivatives; possible resolution of the sometimes confusing and overlapping authority of the SEC and CFTC over OTC derivatives; how and by which federal or state authority credit default swaps (CDS) might be regulated; the potential for regulatory arbitrage; and the danger that stringent regulation in the USA will drive OTC derivatives business offshore.

Unlike markets for other financial instruments, derivatives market participants, largely through ISDA, have for some time cooperated closely with the New York Fed and engaged in a myriad self‐policing activities. Time will tell whether this existing framework, combined with the redoubled self‐policing efforts of market participants, will cause policymakers to seek appropriate legislation that will not threaten the preservation of the OTC derivatives market in the USA.

The paper presents a clear and detailed guide and explanation of recent regulatory initiatives and underlying issues.

The purpose of this paper is to describe the separate but related relief issued by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) that permits the commingling and portfolio margining of centrally cleared credit default swap (CDS) positions held in customer accounts.

The paper provides a brief overview of the bifurcated approach taken to the regulation of CDS; explains the benefits of portfolio margining and the need for portfolio margining relief; and provides an overview of the relief provided by the SEC and CFTC.

The relief provided by the SEC and CFTC may contribute to the efficient use and allocation of capital by market participants; however, the SEC's and CFTC's orders are limited in scope only to CDS products, and the viability of the relief for CDS products will depend upon SEC approval of the margin methodology used by brokers to set margin levels for their customers.

The paper provides practical insights into first of its kind regulatory relief permitting commingling and portfolio margining of centrally cleared derivatives for customer accounts and the requirements incumbent on a market intermediary when implementing a program to commingle and portfolio margin centrally cleared CDS positions.

The purpose of this paper is to demonstrate that certain rules, implemented as a result of the Dodd-Frank Act (DFA) of 2010, should be harmonized between economically equivalent products in swap and futures markets to prevent regulatory arbitrage.

The paper focuses on rules surrounding margin requirements and block size thresholds. As such, a background of clearing and exchange systems is presented to familiarize the reader with the risk management objectives of the regulation. Viewpoints of several leading commentators taken from a Commodity Futures Trading Commission roundtable and comment letters are then analysed to support the argument that margin requirements and block size thresholds should be the same for similar financial products.

Based on the review and analysis of several commentators and industry participants, harmonization of rules for swaps and economically equivalent futures contract should be achieved to prevent regulatory arbitrage.

To the best of the author's knowledge, there are no articles that address the swap futurization debate in this detail. This paper will be of interest to readers who would like to learn more about how the DFA has impacted the derivatives market leading to the recent trend of swap “futurization”. It is also ideal for those who are unfamiliar with current clearing and exchange systems, as it presents background detail of this framework to supplement the debate on swap rules.

This article is an exploration of the history of the regulation of stock futures leading up to the recent regulatory resolution in which the regulators (SEC and CFTC) share responsibilities, thus leading to the trading of single stock futures.

The purpose of the paper is to summarize the Commodity Futures Trading Commission's (CFTC) recent overhaul of its customer protection rules, which regulate how futures commission merchants (FCMs) and derivatives clearing organizations (DCOs) handle customer funds.

The paper summarizes the most significant aspects of the CFTC's October 30, 2013 customer protection rulemaking, explains FCM and DCO obligations under the new regulatory regime, and sets forth a compliance timeline.

The CFTC's recent overhaul of its customer protection rules impose significant new requirements on FCMs and DCOs in their handling of customer funds.

All FCMs and DCOs that handle customer funds should review these new rules and begin putting into place policies and procedures to ensure their compliance as each new requirement comes into effect.

The CFTC's overhaul of its customer protection regime is new and significant. FCMs and DCOs need to understand their new obligations under the rules. As these new rules are the CFTC's regulatory response to the events that led to the insolvencies of MF Global and Peregrine Financial Group, these developments also should be of interest to futures and swaps market participants generally.

To summarize and analyze the CFTC’s proposed enhanced cybersecurity testing rules for entities that run the core derivatives market infrastructure.

This article discusses the CFTC’s proposed rulemaking related to cybersecurity testing, including enhanced cybersecurity testing requirements and guidance on risk analysis and oversight programs, as well as industry commentary on such rulemaking.

This article finds that the CFTC’s recent proposed rulemaking has been met with approval generally by industry participants, and is part of a broader effort to protect against cybersecurity threats that may affect the functioning of financial markets.

Practical guidance from experienced futures and derivatives lawyers.