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New rules to stop clearers becoming 'too big to fail' 

October 20, 2014
Huw Jones, Reuters

Clearing houses that help make trading derivatives safer will have to spell out how they would recover from a crisis without needing taxpayer bailouts, new rules from global regulators said on Wednesday.

The new rules are in the final recommendations from a group of central bankers and market supervisors from the world's leading economies on how to deal with collapsing market infrastructure such as a clearing house, payment systems, trade repositories or central securities depositories.

Clearers, or central counterparties (CCPs), such as the DTCC in the United States and LCH.Clearnet or Eurex Clearing in Europe, ensure a transaction is completed even if one side of a trade goes bust.

Clearers are set to grow massively as volumes will be boosted by a requirement for them to clear all over-the-counter (OTC) derivatives trades.

Read more: Reuters

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