The OTC markets are facing headwinds these days, says Julian Harding, executive director, Tradition. In an interview with John Lothian News Editor-at-Large Doug Ashburn at 2012 SEFCON III, Harding says the decisions this fall by Intercontinental Exchange (ICE) and the CME Group to convert energy swaps into futures contracts has led power and gas commercial counterparties to switch their trading operations from OTC to futures. That’s bad news for the OTC space, which by some estimates has seen volumes drop an estimated 33 percent in 2012, according to one estimate at the recent SEFCON event in New York. Harding says decreased volumes are led in large part by the ongoing uncertainty about swaps regulations. Here’s what’s next for the OTC energy brokerage space in terms of regulation, consolidation and futurization.