Derivatives Traders Adopt Rules to Clear European Credit Indexes

European Union regulation comes into force on Monday that will require traders to start moving the region’s credit derivatives benchmarks through central clearinghouses.

Group of 20 leaders decided after the financial crisis that over-the-counter derivatives should be traded through clearinghouses where possible to lessen the effects of default and reduce systemic risk. Central counterparties don’t take a position on trades and stand between buyers and sellers in the $12.5 trillion credit derivatives market.