OTC derivatives clearing throw up questions for future of some hedge fund strategies
Mandatory clearing of OTC derivatives contracts by 2012 is having a mixed impact on hedge fund strategies. Main worries concern costs and the possible difficulty in maintaining viable strategies.
The imposition of central clearing of over-the-counter (OTC) derivatives could spell the end of some existing hedge fund strategies while opening the door to a rash of new techniques. Overall, however, the diktat from the G20 to have standardised OTC derivative contracts traded on exchanges or electronic trading platforms by the end of 2012 is barely causing a ripple in the hedge fund industry.
There are two reasons for this. Most funds assume the switch will have little or no effect on the way
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