Ice members split over new client clearing model

Dealers fear mutualised exposure in 'sponsored principal' model


A client clearing model championed by Ice Clear Europe as a capital-efficient way to provide extra protection for client assets is dividing clearing members. Some claim it could leave them unfairly exposed in the event of a client default.

The approach – dubbed sponsored principal – allows buy-side firms to face the clearing house directly. The client would make initial and variation margin payments to Ice, rather than using a member firm as an intermediary, and would no longer be exposed to the

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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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