America’s credit default and interest rate swaps markets are bracing themselves for what some predict will be a significant drop in trading this summer as the second phase of the Dodd-Frank financial reforms on over-the-counter derivatives clearing comes into force.

These require buyside firms to centrally clear their trades for the first time. The first phase was introduced on March 11, covering highly active category-one swaps dealers and active hedge funds, which trade more than 200 swaps a month.