Fears mount over CCP client porting
FCMs may not be willing to absorb a defaulting clearing member’s client positions, CCPs and regulators warn
The dwindling allure of client clearing means central counterparties (CCPs) could find it difficult to port client positions to a healthy bank if another member defaults, according to regulators and clearing houses.
If a clearing member defaults, a CCP would seek to move its client positions to another member – often in a matter of hours – without adversely impacting the clients' open positions.
However, capital constraints have prompted some banks to exit the client clearing business, while
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