Ability to use custodial accounts worries OTC clearing members
Custodial accounts worry OTC clearers
Following the collapse of MF Global last year, and disappearance of an estimated $1.6 billion in customer funds, it would take a brave organisation to argue against sturdier protection for client assets - but that is exactly what some banks are doing. Dealers warn that giving clients greater security could mean a corresponding loss of protection for firms that provide clearing services, and argue a balance needs to be struck.
The argument is about third-party custodial accounts. When the US
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