FCMs try to ‘off-board’ credit and commodity funds

Fee hikes are being used to drive out clients that hog capital

The model breaks down: some say traditional client clearing is on its last legs. Illo: Mark Long

Some call it off-boarding. Others speak bluntly of ‘firing' unprofitable clients. The more diplomatic refer to "the new economics of clearing".

It all means the same thing: faced with higher regulatory capital requirements, futures commission merchants (FCMs) are hiking fees and giving clients the choice of paying up or moving on.

"Raising fees is a soft way to off-board clients," says the head of clearing at a bank in New York. "If an FCM feels a client relationship is no longer profitable, the