This paper examines the incentives to voluntarily centrally-clear swaps. It takes advantage of changes brought about by a regulation that mandated exchanging collateral on uncleared swaps to analyze the determinants of traders' clearing decisions. Using unique regulatory data, it finds that the...

We analyze the determinants of financial entities’ choices of whether to voluntarily designate trades for central clearing. In particular, we evaluate the impact of the Uncleared Margin Rule (UMR) on the trading and clearing decisions of firms transacting in the multi-trillion-dollar...

The Dodd-Frank Act mandates that certain standard OTC derivatives, also known as swaps, must be traded on swap execution facilities (SEFs). Using message-level data, we provide a granular analysis of dealers' and customers' trading behavior on the two largest dealer-to-customer SEFs for index...

Purpose: Many recently enacted financial regulations exempt smaller entities. While the literature on systemic risk provides efficiency justifications for certain exemptions, the efficiency rationale depends on measuring size appropriately. This paper aims to argue that notional amount, the...

Closing prices on financial exchanges are often used as reference prices in other contracts. As such, the robustness of the process that determines reference prices is an important aspect of an exchange. This paper examines whether the 2012 change in the reference (or settlement) procedure on...

On June 25, 2012 the Chicago Board of Trade (CBT) changed the procedure for determining reference (settlement) prices for their corn futures contract. Prior to the change, settlement prices were based on prices in trades executed on the exchange floor during the final minute of the floor trading...