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Residual interest rules will lead to higher clearing costs
US regulators have made a number of changes to rules on the segregation of client margin. Taken together, they could increase funding costs for clearing members – which could ultimately be passed on to end-users, writes Diana Shapiro
![diana-shapiro diana-shapiro](/sites/default/files/styles/landscape_750_463/public/import/IMG/060/269060/diana-shapiro-580x358.jpg.webp?itok=eUz40U90)
US regulators have taken a number of steps to improve the protection given to client margin over the past two years, in part driven by the events at MF Global and Peregrine Financial Group, where customer funds were apparently misused. Central to the changes are rules on so-called residual interest – a buffer contributed by US futures commission merchants (FCMs) to cover any shortfall in client margin. The concept has existed for some time, but the new rules – in combination – will dramatically
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