Expert feels extra duties may make clearing houses the new 'too-big-to-fail'
Clearing houses are gearing up to fill the
market space left by futures brokers struggling to come to
terms with low interest rates and tough regulatory reforms,
according to a new report.
Near zero interest rates and increasing
capital requirements from incoming regulation have combined to
challenge futures commission merchants' (FCMs) profitability,
paving the way for clearing houses to fill that void, according
to the report.
Since 2007, the number of FCMs has roughly
halved to 72 while the amount of customer assets divided among
them has stayed the same. The report argues this has fueled
buy-side concerns over concentration risk.
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