Bundle in the jungle: Cut-price OTC clearing threatens competition
Dealers have been given the go-ahead to bundle together execution and clearing businesses – offering cut-price clearing as a way to attract clients to their trading desks. That could shut would-be rivals out of the market. By Matt Cameron and Joe Rennison
In the space of 38 words – added as a footnote to a rule that had already been voted through – the US Commodity Futures Trading Commission (CFTC) may have tilted the competitive landscape for over-the-counter derivatives, giving a decisive advantage to dealers that offer both trading and clearing, and undermining competitors that provide one or the other. Those competitors see the footnote as the result of dealer lobbying, and even some dealers see it as bad policy.
That has not stopped them
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