To increase transparency, the Dodd-Frank reform law requires traders to post high-grade bonds as collateral for most derivative deals executed on a clearinghouse. Bank of New York Mellon figures investors will need $4 trillion in quality collateral to comply. To get around the requirement, bankers have offered to help traders turn risky securities into the bonds they need. Things should be fine as long as the traders don’t go bust. If they do, the banks will be left with the risky bonds.
The United State is not near the top of this list.
The rules might exclude entities with large U.S. insurance underwriting operations.
Organizations in the mix include Sun Life U.S., LifeQuotes.com, Allsup, Cigna and MetLife.
Sponsored by Fidelity Investments
Get insights into the mindset that’s driving today’s advisors to make a move--and help realize their unique business vision.
Don’t miss crucial news and insights you need to make informed investment advisory decisions. Join ThinkAdvisor.com now!
- Free unlimited access to ThinkAdvisor.com which provides advisors, like you, with comprehensive coverage of the products, services and trends necessary to guide your clients in making critical wealth, health and life decisions.
- Exclusive discounts on ALM and ThinkAdvisor events.
- Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.
Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.