In Chatham House's survey of more than 150 companies, 60 percent of respondents who face regulatory requirements from Dodd-Frank indicated that they are not yet prepared for compliance, with nearly three-quarters (74 percent) of end-users facing EMIR compliance stating that they were not fully prepared.

Under current regulations, companies with subsidiaries in different countries that enter into derivatives transactions with each other may be subject to two sets of rules. The lack of clarity surrounding the issue is clear; 44 percent of those surveyed indicated they were unsure of their status under EMIR. Of companies that were aware they faced EMIR requirements, nearly three-quarters (74 percent) said they were not yet prepared for compliance.

When asked how increased OTC derivatives pricing would affect hedging behaviour:

• 13% of respondents said that they expect to hedge less or stop hedging altogether
• nearly half (47%) plan to simply pay the higher prices
• 40% stated they would seek alternative means to manage risk
• separately, just 22 % of end-users said they were definitely considering voluntarily clearing their derivatives or using exchange-traded products such as futures.

The survey is based on a poll of 156 treasury and risk management officials of U.S. and Europe-based firms that utilize derivatives in their risk management activities. The survey was conducted during a recent webinar hosted by Chatham Financial, the European Association of Corporate Treasurers, and the National Association of Corporate Treasurers.