FSA says CFTC’s clearinghouse proposal could increase risk

March 21, 2011

A proposal by the U.S. futures regulator to force clearinghouses to accept more members could inadvertently increase risk in the financial system, the body's British counterpart said on Monday.

The CFTC proposed in December a measure that would prohibit clearinghouses from setting a minimum capital requirement above $50 million on those interested in becoming a member to clear swaps.

In a rare comment letter to the CFTC, Britain's Financial Services Authority said those requirements may increase access, but "to impose them on clearing arrangements for products that have complex or unique characteristics could lead to increased risk to the system in the short to medium term".

Cross References

Dodd-Frank Act, Title VII