Fears mount over CCP client porting

FCMs may not be willing to absorb a defaulting clearing member’s client positions, CCPs and regulators warn

Shrinking FCMs pose challenge for CCP default management

The dwindling allure of client clearing means central counterparties (CCPs) could find it difficult to port client positions to a healthy bank if another member defaults, according to regulators and clearing houses.

If a clearing member defaults, a CCP would seek to move its client positions to another member – often in a matter of hours – without adversely impacting the clients' open positions.

However, capital constraints have prompted some banks to exit the client clearing business, while