The Fast Track to Central Clearing And Optimal Margin Management (CME Group, Woodbine Associates)

May 2013

KEYWORDS: central clearing, clearing, swaps, OTC derivatives, Category II clearing mandate, futures commission merchant, FCM, central counterparties, CCP, buy-side firm, risk management, CFTC, Commodity Futures Trading Commission, margin, netting, portfolio margining, CME Group, initial margin, capital requirements, ISDA, FIA, LSOC, user acceptance testing, UAT, collateral, market efficiency, futures

Authors:

Sean Owens

Organizations:
  • CME Group, Woodbine Associates

Summary:

Category Two firms must move swiftly to finalize central clearing arrangements before the rapidly approaching June 10th deadline.

Waiting is not an option.

Firms that fail to complete arrangements with FCM, CCP, and vendor partners will not be able to trade swaps. This will restrict trading, hedging, and have a material impact on day-to-day business.

Asset managers must move swiftly and decisively to avoid potential last-minute bottlenecks and complications.

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