Waiting for CCP standards

Proposed standards for central counterparties clearing over-the-counter derivatives will be published in May, tackling contentious issues such as governance, margin practices and default management. Dealers are anxious to ensure the standards are demanding enough to create properly robust clearing platforms. Joel Clark reports

The use of central counterparties (CCPs) to clear standardised swaps contracts has emerged as a vital plank in the reform of over-the-counter derivatives markets, both in Europe and the US. Legislators and regulators accept they must make these entities as robust as possible, realising central clearing will concentrate risk within the walls of a handful of approved CCPs. But, already, claims of rival clearing houses competing on margin to win business have emerged.

The job of ensuring CCPs are