New CME guidance to drive tighter margin call management
Clearing house rule clarified to limit the use of grace periods to cases of admin/operational errors only
New guidance from US clearing house CME will help to clarify policy on margin calls for futures commission merchants (FCMs) and their clients, experts say, potentially obliging market participants to up their game in terms of risk management.
“I don’t see it as a fundamental tying of the FCMs’ hands,” says Joshua Hurley, a clearing consultant at Davies Group. “It’s about creating a level playing field across the FCMs and not allowing for weakening of risk management standards.”
In the US, central
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