The Commodity Futures Trading Commission requires futures commission merchants to ensure swaps clients remain within their credit limit by providing a pretrade credit check. Swap-execution facilities say FCMs should be responsible for a "clearing guarantee." FCMs, however, say they should not bear such responsibility without receiving compensation. "It's critical to get certainty of clearing right to make sure these markets work," Morgan Stanley's James Hill said at an ISDA conference in New York. "People are sorting out the issue as we speak, but it has to be resolved before the SEF mandate starts."
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