This is a paper that is focusing on the Transaction cost impact and implications on pricing of derivatives instruments. The paper also provides additional information to use in the writing of the assignment paper. Below is the assessment description to follow:
Impact assessment on Mandatory Clearing of OTC derivatives:
1) Transaction cost impact and implications on pricing of derivatives instruments.
2) Secondly, impact on trade cycle and final settlement process.
· Comparing the trade cycle before and after the change.
3) Impact on volumes of OTC derivatives transactions and expected growth of in the OTC derivatives market.
· Cases where Mandatory clearing has been implemented. Did it contribute to growth in volumes?
4)Impact on current use of OTC derivatives product (e.i. Hedging), in particular as it relates to non-Financial Institutions
5) Also, ability to trade and deal OTC derivatives with multijurisdictional counterparty with clearing mandate, and associated risks.
6) Lastly, impact on determining central clearing eligibility of OTC derivatives
Points on (Pros/Cons) of making OTCD central clearing mandatory:
1) What are the incentives of making certain OTCD mandatorily cleared other than the pre-discussed G20 agreements?
2) Expected improvement in actual risks weighted exposures for local counterparties with local CCP.
3) Mandatory clearing Vs Voluntary Clearing
5) Central CounterParty vs. Bilateral
Please Use resources as follows :
-Thoughts on determining central clearing eligibility of OTC derivatives (bankofengland.co.uk)
Remember, ensure that the pages are exclusive of the cover and the reference pages. Also, ensure that you include all the references you use in finding research for this assignment paper. References should be at least three for the paper. All references, citation, and also writing should follow the APA formatting and styling guidelines. Finally, ensure you focus on the assignment topic in detail