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March 8, 2012

Dan Maguire, Head of SwapClear US, talks CCP competition in the US

Inteview by Telis Demos at the FT in New York, subscription required: view here.

  • He talks about LSOC, about segregation and handling of collateral for US clients, risk standards,
  • Early part of November LSOC is applicable
  • LCH being UK based – are the rules different? LCH is a registered DCO in the US since 2001. Assets are set from the FCM, no commingling across clients.
  • Assets are held on-shore in the US
  • CCPs shouldn’t compete on risk standards – not good in a stressed market, LCH wants to be the ‘gold standard’ in this area
  • Will LCH take collateral against OTCs, which you wouldn’t in other markets? No – LCH is risk averse, and will remove systemic risk
  • Expect competitors to take risk seriously to the same level
  • Some firms waiting for the final DFA rules outcome before embracing clearing

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