As Europe prepares to introduce rules that will drive up the cost of over-the-counter derivatives trading, fears are growing that some investors could be left in the cold.

The problem is that the regulations, likely to come into force next year, are making OTC derivatives business less profitable, leading investment banks to focus on their largest clients or walk away from the business altogether. This could leave smaller buyside clients out in the cold or force them to trade products that may not be suited to their needs. However, it also opens opportunities for non-traditional players to fill the void.