Concern that US swaps rules may hit market

STEEP costs of proposed new US Dodd-Frank regulations could deter proprietary traders from providing the same kind of liquidity in swaps markets as they do in futures, the head of a major Chicago-based firm said.

Proprietary firms, which typically use their own money to trade and do not trade on behalf of customers, would like to play a bigger role in swaps markets.

But they are concerned they will be caught in a broad net of expensive regulations, said Donald Wilson of DRW Trading.

The US futures regulator is overhauling the over-the-counter markets, requiring many to trade on exchange-like venues and go through clearinghouses.