6. Exchange-Traded versus Over-the-Counter-(OTC) Traded Products Flashcards
1
Q
The term future is used exclusively for contracts traded how?
A
On exchange
2
Q
Futures require participants to do what, in order to mitigate one of the participants not fulfilling their obligations?
A
Put aside collateral via margin requirements
3
Q
Who administers the margin requirements in a futures contract?
A
The central counterparty (CCP) such as ICE Clear
4
Q
Do margin requirements exist in OTC transactions?
A
Yes, but they’re managed directly between the two parties, without third party involvement.
5
Q
Which regulations in the EU and US have seen that OTC contracts are becoming increasingly more regulated?
A
- EU - EMIR (European Market Infrastructure Regulation)
- US - Dodd-Frank
