Indirect clearing: The capital conundrum
Draft European Securities and Markets Authority rules on indirect clearing caused uproar when they appeared in June. The regulator removed the most controversial elements in its final text, but dealers are still in the dark about the capital treatment that applies. By Joe Rennison
Anyone who wants to know about the capital treatment for indirect clearing – an untested business in over-the-counter derivatives markets in which clients of a clearing member are allowed to sign up clients of their own – should ask the Basel Committee on Banking Supervision. So says Tom Springbett, manager of OTC derivatives and post-trade policy at the UK Financial Services Authority and chair of a European Securities and Markets Authority (Esma) task force that drew up Esma’s own rules on
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