Regulatory overhauls in the derivatives market initiated by the Dodd-Frank Act will encourage market participants to use swap futures as hedging instruments, but only if those instruments trade with enough volume to provide liquidity, a report from Finadium says. "Swap dealers will be incentivised to use swap futures for their margin efficiencies -- lower initial margin than cleared OTC swaps and cross-margining with other products traded and cleared by an exchange -- but will only stay if there is liquidity," the report says.

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