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 […]

House Residual Interest

We often monitor the FCM data within the US, primarily to gauge our quarterly FCM rankings (eg Year End 2017). Avid students of the FCM data will also know that besides sheer customer margins and customer funds reporting, these reports also reveal how much excess funds the FCM’s carry alongside the customer funds (aka Residual […]

Final 2016 FCM Rankings

Data is now in for the final month of the year, and we can put together our updated metrics on the FCM industry. If you remember from the previous quarterly reports we do on this topic, the common themes have been: The growth in clearing is in swaps European banks stand out as retreating, or […]

CCP Disclosures 3Q 2016 – Trends in the Data

Central Counterparties recently published their latest CPMI-IOSCO Quantitative Disclosures, so lets look at trends in the data, similar to my article on 2Q 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 and more are published each quarter with […]

What percentage of D2C Swap trades are cleared?

We combine BIS and Clarus data sources to provide a holistic view of IRS markets. Almost all of D2D volumes are now cleared, with little variability across the major currencies. Clearing in Dealer-to-Client IRS markets is highly currency dependent. Clearing in D2C markets varies from 27% (CHF IRS) up to 67% (USD IRS). 2016 – It was all […]

Clarus Research cited at UK Parliament Treasury Committee

LSE’s Xavier Rolet cited our research in today’s UK parliament treasury committee meeting. During the session on ‘The UK’s future economic relationship with the European Union’ it was this research on EUR clearing that he referred to; ‘Moving Euro Clearing out of the UK: the $77bn problem?’, in answer to questions from Jacob Rees-Mogg. The […]

Why FCMs Don’t Like Intraday Margin Calls

We keep on hearing how difficult it is to be a clearing broker these days. Case in point – this Risk.net article discusses how FCMs had to find billions of dollars in the middle of the day after the Brexit vote.  This is because, when the market moves, Clearing Houses can choose to make margin calls […]