CCP
WHAT IS THIS? A central counterparty (CCP) manages default risk by collecting initial and variation margin from both parties to a trade. Spill-over losses are absorbed via a default fund to which all members contribute – introducing a degree of mutualised risk – and by the CCP’s own capital. The concept is an old one that was extended to over-the-counter derivatives in the aftermath of the financial crisis.
Iosco outlines concerns over Esma assessment of Asian CCPs
Ashley Alder says European cross-border CCP regulation is not relevant to Asian markets
Standard Chartered to offer client clearing for non-US persons
UK bank looks to offer clearing option outside US regulatory requirements
Ucits derivatives use hamstrung by collateral rules
Asset managers call on regulators to amend Ucits rules
Initial margin to significantly impact development of Asian derivatives markets: Asifma
Asifma head Austen wants exclusion of initial margin from Asian jurisdictions’ derivatives market regulation
CCPs face $161 billion liquidity shortfall to clear FX options, GFXD finds
Results of an industry study reveal the scale of the liquidity burden that would fall on CCPs clearing physically delivered forex options – but a net settlement mechanism could reduce the number by 73%
Cross-currency margining can bring savings, says SwapClear's Michael Davie
Margin efficiency will be the main driver of success in the OTC clearing world and while cross-margining with futures has been touted as a potential game changer, the gains from this may be illusory, says Michael Davie, head of SwapClear, and chief…
European clearing mandate likely to start in 2015 – Risk.net poll
Clients aren’t expected to be subject to a clearing mandate until 2015, according to a Risk.net poll
Mandatory clearing in Korea slated for June 2014
Korea confident of achieving recognition from Europe and is readying to apply for similar status from the US
Fed discount window could resolve CCP collateral liquidity concerns, say clearers
US regulatory concerns about liquidity of government securities collateral could be resolved by access to the Fed’s discount window, CCP officials say
Sefs cause two-tier market as Asia OTC liquidity splits
Divide and rule
Bank of England calls for greater transparency on CCP margin modelling
CCPs should have complete transparency on risk to prevent margin-related failures
Isda – understanding the impact of Emir/Dodd-Frank protocols on Asia
Europe and the US have launched a number of initiatives as part of their drive to regulate the OTC derivatives markets. Jacqueline Low from the International Swaps and Derivatives Association explains how the organisation has responded with a series of…
Timing tension – Europe clearing deadline set to slip
Mandatory clearing in Europe is widely expected to start from next year, but the complex authorisation process, combined with the variety of collateral segregation models, means the start date for some clients could be much later. Tom Osborn reports
Risk USA: Few options to manage CCP exposure, says RBS chief credit officer
Senior executives at RBS have weighed up the bank's potential exposure to CCPs
Start of EU clearing mandate could drag into 2015
Nick Sawyer, editor-in-chief of Risk, and Risk staff writer Tom Osborn discuss the timeline for clearing in Europe, and the tensions this could create with other regulators
CCP frontloading: the pricing nightmare
The pricing nightmare
Clearing Bank of the Year – Citi
Asia Risk awards 2013 winner: Citi – Clearing Bank of the Year
Clearing House of the Year – JSCC
Asia Risk awards 2013 winner: JSCC – Clearing House of the Year
Leverage and CCP capital proposals will hurt clearing – Risk.net poll
Four fifths of respondents to a new Risk.net poll think proposed changes to the leverage ratio and CCP capital rules will make it uneconomical to become a clearing member
Hong Kong lags on Esma equivalence
Esma unable to grant equivalence on Hong Kong's OTC clearing regime as framework is not yet in place
BoE's Tucker wants more robust CCP governance
Bank of England deputy governor Paul Tucker raises concerns over the size and for-profit nature of CCPs
Shadow banking crackdown raises transparency concerns for insurers
National regulators to bring existing rules in line with prescriptive FSB policy recommendations on securities lending
Clearing: Third time lucky
The third US clearing deadline caused relatively little fuss. But the problems that emerged ahead of the first two deadlines haven’t entirely been solved, and some firms sought to postpone their first cleared transactions. Joe Rennison reports
Remembering Lehman: CCPs hardwire collapse into models
Five years on from the collapse of Lehman Brothers, the chaos that followed is now being erased from some value-at-risk models – and clearing houses do not agree on how to prop up their margin requirements. By Tom Osborn