New margin requirements for bilateral instruments will make exchange-traded derivatives more attractive.
High-touch OTC trading remains firmly entrenched.
BIS says new regulations could change derivatives trading.
MiFID II could further fragment global liquidity.
75% of the OTC interest rate derivatives markets is now cleared.
More swaps, foreign exchange and emerging markets products could be included in bilateral compression cycles.
Counterparties have to exchange variation margin on uncleared derivatives from March 2017.