Global regulators' failure to align efforts to reform the $693 trillion derivatives market threatens to undermine economic growth, according to the International Swaps & Derivatives Association.

Investors are struggling to adapt to regional differences to changes agreed by the Group of 20 nations as the industry meets for its annual conference in Munich today. In the U.S. traders have been reporting derivatives transactions to data repositories and have been required to have central clearinghouses back their contracts since last year, while European regulators are still defining the requirements.

Rules introduced after the collapse of Lehman Brothers Holdings Inc. to reduce systemic risk have increased transparency, though they've also made hedging more expensive, according to an ISDA survey published yesterday. Legislators say the changes will enhance their ability to monitor risk taking, curb market abuse and make it easier to identify holdings when a financial institution fails.