Companies and business owners are often caught in the mix with new laws that are created and passed. The Dodd Frank Act became a target of discussions featuring the both positive and negative side of the act. Companies and business owners who engage in trading and investment activities on a day to day basis are primarily the ones who are affected under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd frank derivatives have been an issue a number of individuals are facing. With that said how is Dodd frank derivatives affecting several companies and business owners today?
The Dodd frank act primarily affects financial institutions and their customers on their day to day activities. In an effort to lower risk in various parts of the U.S. financial system, Dodd frank derivatives come into the spotlight and have been approved by the Obama administration which was passed in 2010. Since it has been passed several changes happened and new government agencies such as the Financial Stability Oversight Council and Orderly Liquidation Authority were established with Dodd frank. Large banks that may pose a risk to the financial system because of their size are also regulated under the Dodd-Frank Consumer Protection Act. In addition, financial companies that have been placed in receivership because of their financial weakness can be assisted by the new Orderly Liquidation Fund as the provide help to assist with the liquidation. With that said, Dodd frank has its own set of pros and cons that they bring into the table.
Dodd frank derivatives make it harder for companies and business owners to engage in daily trades with the need for transparency to be practiced between two parties. A third party is oftentimes required before a trade becomes a possibility. That being said, third party services don’t usually come free of charge and the same can also be said when talking about Dodd frank derivatives. The added security it provided is always a very welcomed addition and feature to several companies and business owners. Of course, there are drawbacks as well especially when talking about Dodd frank derivatives.
As mentioned earlier, a third party support and presence is required in order to process trades and investments. Their fees can vary depending on how often one engages in trades on a regular basis. The more trades they perform the bigger the expected fees will become. In addition, the wide availability of trading options that we are experience in the present has made it such task easy to access and invest in. With that said, the market has also been greatly affected. This results in commodities, stocks and other related suffering from a price decrease. This along with Dodd frank derivatives can become very problematic to a lot of companies and business owners.
Dodd frank derivatives still has a long way to go. There is still a lot more that needs to be done in order to fine tune Dodd frank act and ensure that the advantages definitely outweighs its disadvantages.