Single-name CDS clearing held up by fears over SEC regime

Temporary rules for portfolio margining by clients are set to expire in December. Hedge funds say they will stay on the sidelines until they know what happens next


Fears that margin requirements for single-name credit default swaps (CDSs) will leap in December, when temporary rules for buy-side firms expire, is keeping clearing volumes low, according to sources at three US hedge funds. The biggest US CDS clearer, Ice Clear Credit, has so far handled just $60 million in single-name CDSs from the buy side, compared to roughly $2 trillion in client index trades.

The rules were introduced on June 7 by the US Securities and Exchange Commission (SEC), replacing

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