European Union states are looking to expand a draft law curbing risk in privately negotiated derivatives to cover the whole sector, Reuters reports. The bloc is reviewing the European Commission’s plans to regulate how derivatives contracts traded in the $600 trillion over-the-counter (OTC) sector should be centrally cleared.
The law, which will be extended to regulate listed as well as OTC derivatives, will make clearing of many OTC contracts mandatory from 2012. It will make it easier for users to clear listed contracts traded on Deutsche Boerse or NYSE Euronext’s Liffe derivatives platform elsewhere and not be locked into the group’s clearers.
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