EU Commission proposes more robust supervision of CCPs

There has been much recent coverage in the press about whether the EU would require a location requirement for EUR Swaps Clearing. (See City AM, Reuters, Risk.Net). Today the EU Commission put out a press release proposing more robust supervision of CCPs. What have they said pertinent to the debate about Brexit and LCH Clearnet Ltd? Lets extract […]

Clearing Mandates 2017

Which jurisdictions currently have Clearing Mandates in place for Interest Rate Derivatives? There are lots of articles and sources of information about upcoming mandates… …but finding what is already in force is more difficult. We therefore take this opportunity to summarise the Clearing Mandates that are now active across multiple jurisdictions. Sources Before we look […]

BREXIT: Moving Euro clearing conflicts with G20 Market Reforms

Moving clearing of EUR-denominated contracts to the Eurozone is a complicated proposition. Bifurcating cleared portfolios will make bilateral markets more attractive than cleared markets. This raises questions over existing clearing mandates. It also conflicts with the G20 OTC market reforms intended to reduce systemic risk through the promotion of clearing. Enforcing a location policy for a […]

FCM Rankings & Concentration: Q1 2017

Clearing broker data is out for Q1 2017, so I wanted to run the numbers and see if anything has changed. Lets start with a view onto the number of registered FCMs. This shows 64 firms registered (down 1 from Q4 2016), and 55 firms with any Client Requirements (down 2).  On the bright side, there […]

CCP Disclosures 4Q 2016 – Trends in the Data

Central Counterparties recently published their latest CPMI-IOSCO Quantitative Disclosures and in this article I will highlight a few of the key trends, similar to my article on 3Q 2016 trends. Background Under the voluntary CPMI-IOSCO Public Quantitative Disclosures by CCPs, over two hundred quantitative data fields covering margin, default resources, credit risk, collateral, liquidity risk […]

KRW and INR Swap Clearing

The CME have announced they are planning to clear Korean Won (KRW) and Indian Rupee (INR) interest rate swaps in the near future. I wanted to have a look at what these markets look like.  So first things first, I grabbed all trades for non-G4 swaps on the US SDRs, year-to-date.  Did this for both […]

Clearing Participant CDS at ICE

Earlier in April, ICE began clearing single name CDS on a larger number of banks.  ICE has been clearing single names on various financial companies & banks for a while, but what makes this unique is that they have added swaps on their own clearing members. The correct terminology is “Clearing Participant CDS” or just […]

Examining The Cleared OTC FX Options Market

One of the better known / worst kept secrets in the OTC markets these days is that the largest clearing houses are planning to clear FX Options. Details on this are very thin.  LCH have made a couple announcements over the years with respect to clearing options, and if you look hard enough on the […]

The Truth About FCM Concentration

If you are in the derivatives industry, you’ve probably heard that the clearing broker market is overly concentrated. The theory goes something like this: Many FCMs, particularly for swaps, have shut down their business (think Deutsche, Nomura, RBS, State Street, etc) This leads to a lack of choice The usual consequences of such (remaining firms […]

The Unintended Consequences of Uncleared Margin Rules

or Are UMRs an economic mandate for clearing? Since the introduction of Uncleared Margin Rules six months ago, there has been an increase in Clearing across many markets. We have seen the proportion of trades being cleared across NDFs, OIS, Latam and Inflation Swaps increase significantly. This increase in clearing has been accompanied by an […]