Trade Groups Say CCP Resolution Plans Hit Members Hard

Law360, London (June 2, 2021, 3:57 PM BST) -- Proposals to safeguard taxpayers from having to pay out for struggling clearinghouses will hit clearing members harder than owners, derivatives trade groups have warned the U.K. government.

The International Swaps and Derivatives Association and the Futures Industry Association said on Tuesday that HM Treasury's plans to expand the U.K.'s resolution regime to central counterparties, or CCPs, will disproportionately allocate losses to clearing house members rather than the owners of the venues. CCPs absorb risk between buyers and sellers if one side defaults in the market for over-the-counter derivatives.

The government announced proposals in February to wind down CCPs that are in difficulty...

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