Custody Risk summer 2012

cr0512-ofc-cover

It doesn't seem a lot to ask - when entering into a trade that is legally required to clear, it would be nice to know that the counterparty has access to a clearing house. Unfortunately, what seems like a simple formality is fraught with difficulty. That's because the vast majority of derivatives market participants will achieve access to clearing indirectly, through a futures commission merchant (FCM), which will place limits on the amount of business each client can do - and the FCMs themselve