Margin minutiae at issue in Jefferies v IDCG suit

Jefferies is suing International Derivatives Clearing Group over claims the central counterparty’s futures contracts would replicate over-the-counter swaps – a case that turns on collateral and margin differences in the cleared and uncleared markets. By Mark Pengelly


At first glance, it seems a familiar tale. A firm enters into a portfolio of derivatives trades with a counterparty, but the price soon moves against it. Having suffered tens of millions in mark-to-market losses on the trades, the firm calls its lawyers. Normally, the target of the resulting lawsuit would be the firm’s dealer – but in this case, it’s a central counterparty (CCP).

“It’s very unusual for market participants to sue an exchange or a clearing house for a faulty contract. I can’t

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Switching CCP – How and why?

As uncertainty surrounding Brexit continues and the impacts of Covid-19-driven market volatility are analysed, it is essential for banks and their end-users to understand their clearing options, and how they can achieve greater capital and cross…

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