Managing Derivatives Contracts : A Guide to Derivatives Market Structure, Contract Life Cycle, Operations, and Systems

CHAPTER 9

The Dodd-Frank Act and Other Reforms

In the wake of the 2007–2008 financial crisis, legislative and regulatory regimes around the world have introduced laws to reform financial markets—notably the Dodd-Frank Act in the United States and the European Market Infrastructure Regulation (EMIR) in the European Union, as well as other similar laws in many countries and regions. The joint aim has been to provide for a uniform global marketplace without regulatory gaps and disparities between regimes.

A principal objective of these laws is to reduce the systemic risk in financial markets. These laws are focused on certain perceived flaws in over-the-counter (OTC) derivatives markets that many hold responsible for exacerbating the crisis. These ...