TMX backs down on blanket margin hike after members revolt

Canadian CCP will review methodology and apply margin multipliers at the product level

The rate on S&P TSX 60 Canadian equity index futures spiked from C$5,117 per contract on March 6 to C$14,091 on April 3

Canada’s largest clearing house has abandoned plans to impose a flat 15% top-up to initial margin balances after a backlash from members. 

The Canadian Derivatives Clearing Corporation had claimed the move was necessary to guard against volatile markets; members argued it was procyclical and flew in the face of the defaulter-pays logic of central clearing.

After taking feedback from members, the clearing house – which is owned by exchange operator TMX Group – decided to move ahead with a 1.15