Plans to force over-the-counter (OTC) trading of derivatives on to exchanges to reduce counterparty risk need to be rethought by regulators, according to the Asia head of one of the world's biggest brokers.

Pierre Gay, Asia-Pacific chief executive of futures broker Newedge, said the creation of a central clearing house to act as counterparty to OTC transactions on exchanges could be dangerous because it would transfer risk from banks to the clearer.

Mr Gay's comments add weight to concerns that a regulatory move to force OTC contracts into central clearing mechanisms could create unforeseen risks for the financial system.

He said a shift to exchange trading and central clearing would have little impact on brokers because the same marketmaking skills would be required to price and trade derivative products.

But forcing all such business to pass through a central clearer would be “a bit too much”, he argued in an interview with the Financial Times.

“The risk we see is that . . . it would transfer the risk from bank to bank, to a clearing house, which, being private, would also have to make a profit and we could create a globally risky situation.”

Mr Gay said clearing was one possible solution for OTC derivatives, “but we don't think it is the only one and we should look at other solutions”.

“If we were able to have a platform where prices became more transparent, where we know what is trading during the day, it would help the bank [and] the buy side to have a better view of what the real price is,” he said.