Banks traditionally operate in a regulated environment.

Every nation has its own laws that govern banking and the banks are required to adhere to the local laws in the place where they operate.Of lately a number of acts and policies have co me into force which aims at regulating the Over The Counter derivatives markets. In US, the Dodd-Frank act has been enacted and similarly the Europen Market Inf rastructure Regulation (EMIR) brings some changes about the reporting obligation s to trade repositories by the banks. They have also made some changes in the st ructure of wholesale markets and in particular how derivates are traded, cleared and settled. The accounting policies of these OTC derivatives will change signi ficantly. These are a completely new set of regulations and they will pose signi ficant challenges to all the investment banks involved in these activities. Not just in the EUropean nations these rules are being amended but also in the Asia Pacific Region.