Derivatives houses to open accounts with Federal Reserve
Derivatives brokers choosing where to park their margin money will now have the option of the world’s most powerful central bank.
The Federal Reserve Bank of Chicago has authorised three of the US’s largest clearing houses, run by CME Group and Intercontinental Exchange, and the Options Clearing Corporation, to open an account at the central bank. ICE’s permit is for its US credit derivatives clearing house.
The change at the CME applies only to house cash belonging to brokers, its executives said on a conference call on Thursday. Margin posted by their customers will continue to be walled off and held by commercial banks or in US Treasury bonds, they confirmed.
The full article is available here: http://www.ft.com/intl/cms/s/0/eaa322ec-0d5e-11e6-9cd4-2be898308be3.html?siteedition=intl#axzz47DefUITT
