Public debate begins on Thursday on the most significant regulatory reform to come to the OTC derivatives industry in decades.
Coming in the wake of the financial crisis that rocked the world markets in 2008 -- and continues to weigh on economies around the world -- the legislation puts a lot at stake on Capitol Hill. As legislators work to reconcile differing reform legislation passed by both the U.S. House and Senate, they will rewrite the rules that allow big banks to profit handsomely from OTC derivatives deals.
At issue are such fundamental concepts as the definition of an exchange, who has to clear OTC trades and what companies can be involved in derivatives in the first place. The futures industry also stands to be affected by potential new requirements that these institutions to clear those deals through an established clearinghouse.