About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

US Regulators Pushing for Increased Pricing Transparency Around CDSs

Subscribe to our newsletter

US regulators have this week been highlighting the need for more transparency around OTC derivatives pricing, in particular around credit default swaps (CDS), which are now moving towards being centrally cleared in the market. Speaking in New York at an International Swaps and Derivatives Association (ISDA) conference, Theo Lubke, senior vice-president at the Federal Reserve Bank of New York, told delegates that the CDS market must act as a benchmark for other OTC markets with regards to pricing transparency.

The Fed uses CDS prices as a benchmark to assess market and credit risk, explained Lubke, and this means that transparency is of systemic importance in this space. He reckons a lot more needs to be done to improve transparency around the pricing of these instruments and soon: “The more CDS is used as a reference tool, the more important it is that market participants understand the pricing process.”

Moving CDSs and other OTC derivatives onto central clearing counterparties (CCPs), as suggested by the Obama administration’s regulatory overhaul proposals, is likely to improve pricing transparency to some extent. Indices on CDSs have already begun to be cleared by the CCPs currently operating in the market and this has indeed meant that pricing for these has been made publicly available. However, clearing on these CCPs has not yet been mandated by Congress and it will take regulatory approval for this to happen on a wider scale.

The goal of the regulators may be to mitigate counterparty risk in the OTC derivatives market but a side effect will be institutionalising pricing sources. Pricing feeds that are employed by the various CCPs will therefore give certain data providers the edge over others, although the need for financial institutions to provide best price to their clients will also add to the valuations data cause.

Congress is due to vote on these measures before the end of the year and the valuations vendor community will have to wait until then before it can judge the full impact of regulation on the space.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Holistic Conduct & Surveillance: Unifying Trade, Voice, and eComms Data with AI

Surveillance in capital markets has evolved in silos. Trade surveillance, voice recording, and electronic communications monitoring have traditionally operated as parallel control functions, each with distinct datasets, workflows and alerting logic. Yet recent enforcement actions on both sides of the Atlantic – ranging from off-channel communications failures to market manipulation cases – demonstrate a consistent...

BLOG

US ESG Pullback Opens a New Competitive Question

US resistance to sustainability disclosure at state and federal level is widening the regulatory gap for US-domiciled firms operating internationally. In March 2025, the Securities and Exchange Commission (SEC) voted to end its defence of federal climate-disclosure rules. In December 2025, the White House issued an executive order targeting proxy advisers accused of promoting ESG...

EVENT

Data Management Summit London

Now in its 16th year, the Data Management Summit (DMS) in London brings together the European capital markets enterprise data management community, to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

RegTech Suppliers Guide 2019

Welcome to our brand new RegTech Suppliers Guide. This unique guide provides detailed data profiles on close to 100 suppliers in the RegTech world, offering you an unrivalled selection of solutions for your most pressing financial regulatory challenges. The aim of the A-Team’s RegTech Suppliers Guide is to steer you through this complex marketplace, offering...