Tabb Group has released a survey that concludes the introduction of swap execution facilities in derivatives trading will improve market conditions.
Almost 70% of the 140 market participants that completed the survey suggest that the reduction of counterparty risk will ensure that the global swaps market will become more efficient. Respondents included asset managers, clearing houses, hedge funds, and dealers.
Most participants surveyed expect rules surrounding the global swaps market to take effect in Q1 of 2012, despite the fact that July 2011 is the deadline for most derivatives reform according to Dodd Frank.
The survey also highlighted that not all respondents are in support of whether the new regulations will reduce or eliminate systematic risk; 40% of those surveyed are expecting the opposite. Indeed, Tabb analyst, Kevin McPartland, says, “The fact that 40% of market participants didn’t think that the creation of SEFs reduced systemic risk means that either Washington missed the mark, or SEFs are not a part of the systemic risk story at all. That’s left to clearinghouses and repositories.”