Deliverable Forex Derivatives

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Questions and Answers

What did the U.S. Treasury Department exempt from key Dodd–Frank regulations?

  • Interest rate swaps
  • Deliverable forex derivatives (correct)
  • Central clearing
  • Platform trading

What was the basis of the exemption of forex derivatives from key Dodd–Frank regulations?

  • Minimal impact on systemic risk
  • Small amount of counterparty risk (correct)
  • Low market volatility
  • High liquidity

What did the author of the text suggest regarding the counterparty risk of deliverable forex derivatives?

  • It is negligible compared to other derivatives
  • It is minimal and manageable
  • It is not as small as suggested (correct)
  • It is not significant in the forex market

What aspects of deliverable forex derivatives remain lightly regulated?

<p>All of the above (D)</p> Signup and view all the answers

What did the U.S. Treasury Department exempt forex derivatives from involving margin, central clearing, and platform trading?

<p>Dodd–Frank regulations (C)</p> Signup and view all the answers

What significant steps have been made in the United States and Japan toward pretrade price transparency and competitive swap trading?

<p>Migration of OTC trade toward exchanges and MTFs (D)</p> Signup and view all the answers

Where are more than two-thirds of new trades in standardized interest rate swap and CDS index trading in the United States conducted?

<p>MTFs (D)</p> Signup and view all the answers

How do buy-side firms typically obtain their positions on MTFs?

<p>Multiple dealers responding to requests for quotes (RFQ) (B)</p> Signup and view all the answers

What is the result of interdealer trade conducted on MTFs that use a central limit order book?

<p>A 'two-tiered' market (C)</p> Signup and view all the answers

What is a shortcoming of the reforms in terms of improving competition and lowering trading costs to buy-side market participants?

<p>Not bringing all wholesale market participants into the reforms (B)</p> Signup and view all the answers

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