The adoption of new types of accounts from clearing houses could help brokers tackle regulatory capital pressures
By Chris Hall
As regulatory deadlines for central
clearing bear down on the European over-the-counter derivatives
market across 2016, innovation by clearing houses is gathering
pace. New account structures and participation models are being
rolled out by central counterparties (CCPs) as clearing members
and their buy-side clients adjust to mandated central clearing
of interest rate swaps (IRS), followed in 2017 by other liquid
OTC derivatives, including credit default swaps (CDS).
But while buy-side firms might benefit
from simpler porting and reduced transit risk, bolstering the
asset protection provided by the individual segregated accounts
(ISAs) introduced by the European Market Infrastructure
Regulation (Emir), much of the focus is on alleviating clearing
brokers’ capital burdens.
– which clears more than 90% of all cleared IRS
globally – is due to launch this quarter a new service
that will enable collateral assets to remain in custody
accounts until required. Frankfurt-based Eurex is expected to
unveil its ISA Direct participation model, while ICE Clear
Europe is developing its Sponsored Principal offering ahead of
central clearing of CDS and re-authorisation by the European
Securities and Markets Authority (Esma).
This article is available to subscribers and registered users
Please log in to continue reading.
Not yet registered? Take a free trial.
If you have already taken a free trial you
have ongoing access to the analysis section of FOW.com including this story.
Log in using your details below to read.
Already have an account? |