Sens. Grapple With OTC Derivatives Reform

Law360, New York (May 25, 2011, 7:33 PM EDT) -- Securities experts on Wednesday cautioned lawmakers to take a measured approach to regulating the over-the-counter derivatives market to ensure that illiquid contracts are kept from clearinghouses and market participants help shape the rules.

The Senate Subcommittee on Securities, Insurance and Investment heard testimony from public and private sector experts on the derivatives industry regarding the Dodd-Frank Wall Street Reform and Consumer Protection Act’s impending regulation of a $600 trillion OTC derivatives market that precipitated the economic crisis.

While a clearing agency would essentially act as a...
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