One of the regulatory initiatives following the financial crisis was to push interest rate swaps from the opaque over-the-counter or OTC world to a more transparent, screen-traded environment. Regulators have long, favored exchange traded and cleared products for several reasons. Firstly, increased transparency, with screen trading both market participants and regulators can see prices and volumes more clearly. Next, the netting of risk positions. Centralized clearing allows counterparties to offset positions, which reduces the overall risk exposure. And finally, margining. This involves the regular paying and receiving of losses and gains on derivative contracts prior to maturity based on day-to-day movements in value of the contract, regular margin calls on clear trades significantly reduces counterparty credit risk. In the United States, the Dodd-Frank Act 2010 introduced the requirement that certain standardized US dollar swaps must be traded on swap execution facilities, or SEFs. Other currencies have since followed this model, encouraging the trading of standardized swaps to migrate to these platforms, SEFs or multilateral trading facilities, MTFs, as these platforms are referred to in Europe, are designed for trading standardized swaps. Meaning that only highly liquid maturities and terms can be executed on these platforms. For non-standardized swaps, such as forward starting swaps or swaps in illiquid maturities, the market continues to rely on the traditional OTC over-the-counter trading model, where swaps are negotiated and executed directly between counterparties. Nonetheless, as shown in the diagram, there has been a gradual shift towards SEF traded swaps with a small majority of swap volumes now executed through SEFs. The graph breaks down the total notional volumes of interest rate derivatives or IRDs traded on SEFs, versus off SEF trades. While SEFs have captured a growing share of the swap market, the distinction between SEF traded and OTC swaps persists as the OTC markets remains essential for customized or less liquid swaps that don't fit into the standardized categories.