Rising Costs, Risks Threaten Futures Brokers, DeWaal Says
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Changes to how clearinghouses are used to back derivatives trades are putting brokerages on “a dangerous path” that threatens the futures business model, said Gary DeWaal, general counsel of Newedge USA LLC.
The risk to brokerages, known as futures commission merchants, or FCMs, began with the Dodd-Frank Act requirement to guarantee swap trades with clearinghouses, DeWaal said in an interview today at the Futures Industry Association annual conference in Boca Raton, Florida.