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Shifting derivatives trading onto exchanges could shave $300 million off JPMorgan's revenue.
Another strand of reforms, such as pushing derivatives trading onto clearing-houses, has tried to improve transparency.
With that history in mind, Congress inserted into Dodd-Frank a provision that forces derivatives trading onto regulated trading platforms.
And the benefits from shifting derivatives trading onto recognised platforms (mainly, more transparency) outweigh temporary losses until they do.The other two are more worrying.
At the same time, another part that drives derivatives trading onto clearinghouses and exchanges could lessen, in aggregate, the amount of capital that banks must hold.
It would ban many unfortunately not all of the private, custom-made derivatives at the center of the financial meltdown and force most derivative trading onto open exchanges.
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That is why it is so essential to move derivative trades onto fully transparent exchanges.
The commission said moving trades onto exchanges would improve price transparency and strengthen risk management.
A ban on brokers' crossing networks which Judith Hardt, director-general of the Federation of European Securities Exchanges, says was her group's biggest victory is designed to push trades onto "lit" exchanges.
CME Group is an unlikely foe, having reaped significant new business from Dodd-Frank's decision to push once-unregulated trades onto public exchanges.
The law, among other things, requires banks to register with regulators, push their derivatives trades onto regulated trading platforms and turn over a battery of information about their trades.
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