Access to central counterparties: why it matters and how it is changing.

PThe G20 leaders’ commitment that all standardised over-the-counter (OTC) derivatives should be centrally cleared is intended to increase the transparency, safety and resilience of the global financial system. Achieving these objectives depends importantly on the conditions under which market participants can obtain access to central clearing counterparties (CCPs). Until recently, access criteria for some major OTC derivatives CCPs – developed in the era of voluntary clearing – admitted only the largest global dealers as direct clearing members and offered limited indirect clearing. There was thus the concern that increased central clearing of OTC derivatives would exacerbate the concentration of risk in those institutions. Partly in response to such concerns, principles and rules have been put in place to broaden access to major global CCPs. This article discusses the implications of clearing access arrangements for economic efficiency, for the safety of the CCP and for systemic risk. It also reviews steps that have been taken to ensure fair and open access.