Clearing House Calculus: Membership Approaching Disintermediation

Author(s):
Thomas Lehrkinder
Date:
May 18, 2016
Research Type:
Market Note
Executive Summary

Exchanges and clearinghouses are taking advantage of the results of OTC market structure changes and the numerous rules and regulations that were implemented as a result of the financial crisis. Dodd Frank, Basel III, MiFID II, and others are all putting capital pressure on the big banks who used to be the backbone of the futures markets. In some cases, these FCMs have decided that the business is no longer profitable when you add up all the expenses including the cost of capital. As a result, the population of FCMs has decreased dramatically causing some concern around concentration risk.

Protection of the client and their assets has always been at the forefront of futures business and this continues to be the case. Clients have also always viewed their FCM as a valued partner in terms providing solutions and working with exchanges. With less FCMs, for-profit exchanges and affiliated clearing house have taken note and have identified ways where they can step in and provide the buy side with services that are traditionally provided by FCMs.

Areas of Interest
  • Derivatives
  • Futures
USD $5,000.00
You are not logged in for access or purchasing of products.
Please login above or contact TABB Group Sales for subscriptions or additional products.

Related Reports

More from the Author(s)

Big Brother Is Watching: The Implications of CFTC Reg AT for the Futures Industry
Date:
Feb 23 2016
Author(s):
Thomas Lehrkinder
Research Type:
Vision Note
US Futures Market Review: Fourth Quarter and Full Year 2015
Date:
Mar 01 2016
Author(s):
Thomas Lehrkinder
Research Type:
Quarterly Report