CCP
WHAT IS THIS? A central counterparty (CCP) manages default risk by collecting initial and variation margin from both parties to a trade. Spill-over losses are absorbed via a default fund to which all members contribute – introducing a degree of mutualised risk – and by the CCP’s own capital. The concept is an old one that was extended to over-the-counter derivatives in the aftermath of the financial crisis.
The end of the waterfall: Industry faces up to CCP recovery and resolution
The end of the waterfall
OFI Asset Management: Cutting the costs of clearing
Early adopters of over-the-counter derivatives clearing tended to be the big beasts of the buy-side universe, but smaller firms – such as France’s OFI Asset Management – are coming on board as well. By Tom Osborn
US-European divergence over default funds
Quotes of the quarter
Editorial: Clearing the way
Banks have focused their attention on central clearing – but trade reporting could prove even more problematic
China onshore OTC clearing postponed until 2014
OTC clearing onshore in China will be delayed until at least the end of 2013 or early 2014 according to an official at Shanghai Clearing House
Too much choice: The problems with Europe's plethora of segregation models
In the US, segregation of client assets is a simple matter – only one approach is allowed for over-the-counter trades. But in Europe, where there are more clearing houses, and no prescribed approach, things are messier. And it could be dealers, not…
Clearing chaos: US OTC industry braces for June deadline
Clearing – and present danger
Isda AGM: CCP ‘Armageddon’ could lead to sovereign default, warns HSBC exec
Single bank default could affect multiple CCPs, leading to crippling default contribution for existing members and a chain of bank failures
Isda AGM: Asia clearing houses to dominate, says survey
Many derivatives users in Asia expect to clear through local CCPs, creating the potential for liquidity fragmentation and higher costs
Libor/OIS spread challenges insurers' risk management programmes
Spread carefully
Op risk fears as OTC clearing gathers steam
The OTC market's complex new structure will lead to operational glitches, conference participants warn
Singapore positions itself as OTC clearing hub for Asia
Clearing link with KRX will lead to larger volumes and efficiencies at SGX
Central banks weigh use of OTC clearing houses
Survey finds nearly 40% of central banks are considering clearing their OTC derivatives
Nasdaq OMX to launch FX clearing in November
Stockholm-based clearing house becomes the latest to announce its intention to enter the forex space
The struggle for consensus on European clearing addendum
The move to central clearing poses a huge documentation challenge. A standard template has been developed for European derivatives users – but will this solve the problem? By Duncan Wood and Lukas Becker
Dealing with CCP proliferation
A variety of clearing houses are emerging in Asia – in some cases, backed by domestic clearing requirements for local currency derivatives. That poses some difficult questions for participants active across the region. Should they sign up to all of them…
JSCC to start client clearing by March 2014
Japan’s over-the-counter derivatives clearing house will soon allow member banks to offer client clearing and it also plans to merge with another domestic clearing house, according to a senior official.
MAS warns on fragmented clearing and reporting
Asian financial markets have made progress in setting up CCPs and trade repositories, but greater harmonisation is needed across borders, Singaporean regulator warns
Interview: Six Securities Services' Thomas Zeeb
Six of the best
Esma says national regulators must decide product eligibility for third-country CCP transition period
The European Securities and Markets Authority has addressed some of the concerns over which third-country CCP platforms and products are eligible for the transitional period, which begins on March 15