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The product no-one wants to sell: portability held up by lack of rules
Users of client clearing services want to know their cleared trades have a home if the original provider collapses. Quietly, some dealers are offering guarantees, but they fear the regulatory treatment these contingent funding liabilities might receive. By Ramya Jaidev
![portability portability](/sites/default/files/styles/landscape_750_463/public/import/IMG/211/188211/portability-580x358.jpg.webp?itok=E57PdEwi)
It's the product every client wants to buy and no dealer wants to offer: a guarantee to accept a cleared portfolio in the event of another clearing provider collapsing. Without this portability guarantee, derivatives users that access a central counterparty (CCP) indirectly, through its inner circle of clearing members, could have their positions liquidated if one of the member firms implodes – and smaller banks that use indirect clearing won’t be able to apply the rock-bottom 2% risk-weight to
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