Too much choice: The problems with Europe's plethora of segregation models

In the US, segregation of client assets is a simple matter – only one approach is allowed for over-the-counter trades. But in Europe, where there are more clearing houses, and no prescribed approach, things are messier. And it could be dealers, not clearing houses, that ultimately decide what is offered. By Tom Osborn

When Europe's over-the-counter derivatives clearing rules take effect – probably during the first quarter next year – users may be able to choose from no fewer than 15 different segregation models, offered by the market’s four major central counterparties (CCPs). That could be bewildering, but for the clearing members that act as gateways to a CCP, the problem is less abstract – there will be too many different account types to support.

“We’re concerned about the multiplicity of margin