Dodd Frank

Last week we published part one of our Q&A with Fredrik Ekström, president of Nasdaq OMX Clearing. We discussed the EMIR approval process for CCPs, of which Nasdaq was the first to be approved, and accessing the Stockholm based CCP.

In the world of capital markets, the public spotlight has predominantly fallen on pre-trade and trade analysis. The media focusses its attention on the price of shares, the movement of currencies, the possibility of changes to interest rates and the fundamentals of markets, as well as corporate news.

The announcement by Intercontinental Exchange (ICE) that it is to infuse a chunk of its own capital into some of its default funds across the world is welcome news as a growing percentage of the notional $700 trillion over-the-counter (OTC) derivatives market is pushed onto centralised clearing houses (CCPs) as mandated under the Dodd-Frank Act in the US and the European Market Infrastructure Regulation (EMIR).

The European Commission and other global regulators are assessing the options by which to deal with the failure of a central counterparty clearing house (CCP).

The mandatory clearing space is developing quickly in the post-crises environment. Alex Harborne looks at the space in more detail.