Client Clearing

Will leverage ratio cause an FCM concentration crisis?

Risk magazine editor Duncan Wood makes a good point in his article The invisible incentives of clearing (subs. required) - the FSB / BIS ignored leverage ratio effects in concluding that incentives are in place for clearing both on banks self-clearing their trades and on FCMs clearing trades for clients.  In this post I look at the FCM capital cost problem and whether changes to bank capital rules alone can deliver an economically sustainable future for FCMs.

ISDA/FOA Addendum | Do you speak legal?

Maria points out a candidate for the longest single derivatives sentance award.

How Ready Are Firms for Mandated European Clearing? | Make Your Voice Heard

One of the questions which many in Europe would like to understand, is how ready (or not) firms are to participate in central clearing, especially now that ESMA are working through the regulatory process to begin mandatory clearing. The OTC Space is conducting research via interviews, and a survey (below) to gather information to put substance into an article to answer this question.

RBS to Wind Down OTC Client Clearing Business

The only way cost is going for OTC products is up - and the result will see structural changes to the firms operating in the OTC market.

New CFTC head tackles OTC unintended consequences | risk article

The new Chairman of the CFTC is making a fast start in tackling the unintended systemic risk consequences of Dodd-Frank's Title VII derivatives rules.  Could this avert a future FCM concentration risk crisis and enable legacy stockpiles of uncollateralized counterparty risk to be more easily reduced in response to the capital incentives?   Let's hope so.

Eurex Clearing prolongs deadline for fee waiver application | Get it While it Lasts

Not surprisingly, Eurex Clearing has extended the date for the fee waiver application to 30 May .

The week that was (Dazzling Derivatives; issue of 8th October 2013)

Dear all, This week, as started last week, also sees this newsletter spread over several pages - according the regular headers you are accustomed to. Happy reading. The TOP Stories of last week:

Client Clearing of Interest Rate Swaps at CME and LCH

As two months have passed since my article USD IRSwap Client Clearing, CME or LCH?, I wanted to see what the data now shows. Having diligently collected daily figures for the past 2 months from the CME and LCH websites, I have produced weekly volumes for USD IRS and EUR IRS for the 8-week period 5-Aug-13 to 27-Sep-13.

The week that was (Dazzling Derivatives; issue of 30th September 2013)

Dear all, Back after a refreshing holiday - please receive the latest news digest on the dazzling world of derivatives. From this week onwards I will add "pagination" to the Dazzle - this means that you will find each separate area of the newsletter (e.g. Regulation Europe, Infrastructure, etc.) on its own page (look for the Pages 1,2,3,4,6 underneath the Like button). (FYI, some articles require a subscription (e.g. RISK, Financial News), others a free registration (e.g. Tabb Forum, DerivSource))

Indirect Clearing. Can it work?

As EMIR moves forward to its next milestones, central clearing, one of its major pillars (if not the core of EMIR) , is the next big challenge for all of us, assuming that trade reporting is already analysed and now in a testing phase.