Regulators Look to Ease Entry in Derivatives Clearing (WSJ)
U.S. regulators have proposed lowering the bar for membership into clearinghouses, which guarantee swaps. The move would force big banks to share profits relating to OTC derivatives business with non-incumbent firms under the new regulatory regime-a business opportunity estimated to be several billion dollars, according to consultants at Booz Co.
The CFTC last week voted in a proposal that derivatives clearing organizations wouldn't be permitted to set capital requirements on new members above $50 million-significantly lower than the existing hurdles. "The proposed participant eligibility requirements will promote fair and open access to clearing," CFTC Chairman Gary Gensler said last Thursday at a hearing. The proposal "promotes more inclusiveness, while allowing the clearinghouses to scale a member's participation and risk, based upon its capital."
Publication
Wall Street Journal
Date
December 20, 2010
Cross Reference (links require a Cabinet subscription)
Dodd-Frank Act, Title VII, Sec. 725(c)(2)(C)
Proposed CFTC Rule 39.12.