Overcoming the Cost and Complexity of Central Clearing Mandates


Sapient Global Markets recently conducted a survey to examine the impact of central clearing mandates on broker-dealers, buy-side firms, exchanges, FCMs, proprietary high-frequency trading (HFT) firms, regulators and sell-side firms.

This paper examines three key challenges and opportunities that came to light during our survey—the cost of clearing, regulatory uncertainty and complexity and the emergence of clearing utilities to address the challenges of central clearing mandates and level the playing field for most market participants.

The survey included questions such as:

  1. How have the new Central Clearing Mandates impacted the various areas of your business?
  2. What is your greatest concern related to new clearing regulations?
  3. How prepared is your firm to comply with new clearing regulations?
  4. Would you be interested in a purpose-built utility (mutually owned by market participants or non-profit firms) to address unique buy-side clearing requirements? This would bring market participants together into a consolidated framework?
  5. Would your firm be interested in designating non-core business operations to industry-wide utilities? Examples include the transformation of messages into a standard format or a utility to assist with a firm’s KYC obligations?

Survey respondants include:

  1. The Buy-side
  2. Regulators
  3. Prop HFT trading firms
  4. FCMs
  5. Exchanges
  6. Broker Dealers
  7. The Sell-side

Each question has statistical answers with illustrative graphics and a commentary on the outcome of each survey question. Please click through to the Sapient website to register for your free copy of the survey.