Lack of incentives slow uptake of deliverable FX clearing

Absence of regulatory drivers and use of prime brokerage curbing demand, say panellists

Slow-uptake-of-deliverable-FX-clearing

Buy-side participation in deliverable foreign exchange derivatives clearing has failed to take off so far due to a lack of incentives for users to make the move, panellists have claimed.

Unlike the interest rate swap market, there has been no regulatory clearing mandate in FX derivatives, while the non-cleared margin rules exclude firms from posting initial margin on deliverable FX forwards or swaps. That has meant buy-side firms have had less need to consider clearing their physical FX swaps

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