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.

Extraterritorial clash continues for clearing houses

While the Group of 20 nations want to see progress with financial regulatory reforms, individual authorities around the world are reluctant to relinquish domestic sovereignty over standards for central counterparties. Luke Clancy reports

FX options clearing analysis in final stages

The GFMA's global forex division is understood to be close to completion of its analysis of five years of options trading data - a project that is intended to lead to a solution for options clearing

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