ISDA Publishes Research Study about U.S. SEFs' Impact on Global Derivatives Markets and Global Liquidity Pools

ISDA published a research study, titled "Cross-Border Fragmentation of Global Derivatives: End-Year 2014 Update," that analyzes the changes in global derivatives markets and liquidity pools since the introduction of the U.S. swap execution facility ("SEF") regime in October 2013.

The study found that global derivatives markets continued to fragment along geographic lines since the introduction of the U.S. SEF regime in October 2013, particularly in the market for euro interest rate swaps. The study found, however, that cross-border liquidity pools are growing, particularly for U.S. dollar interest rate swaps. In the report, ISDA hypothesized that this growth likely reflects the decision of an increasing number of non-U.S. firms to access U.S. dollar liquidity via SEFs, and concluded that cross-border growth will depend on the harmonization of rules in various regions.

See: ISDA Study.