Morgan Stanley tops Credit Suisse as biggest US client clearer

Client clearing for OTC derivatives increased across the board, while the number of FCMs in the business declined.

Morgan Stanley has overtaken Credit Suisse as the top US client clear for OTC derivatives, a position the Swiss bank has held for over two years.

According to data from the National Futures Association, the US bank was listed as the biggest clearer in the US, as measured by the amount of client margin it is required to hold.

As of 30 June, Morgan Stanley faced a requirement of $12.2 billion for cleared swaps, a figure that has shot up by almost 28% year-on-year. Meanwhile Credit Suisse saw its client cleared swaps requirement decrease by almost 14% to $10.7 billion.

Citi retains its spot as the third biggest client clearer, followed by JP Morgan and Wells Fargo.

Last week the US Commodity Futures Trading Association released its data on FCMs for April, in which OTC derivatives client clearing activity increased with over $64.3 billion worth of swaps required for client clearing, up from $58.9 at the same point last year.

However, the number of active client clearers decreased by three to 19, and the number of FCMs as a whole dropped by eight to 70, with the incoming capital rules on banks causing further contraction in the derivatives clearing business.

Last week industry bodies including the Futures Industry Association (FIA) and the International Swaps and Derivatives Association (ISDA), urged the Basel Committee on Banking Supervision (BCBS) to review the impacts the leverage ratio will have on client clearing.

Meanwhile the Bank of England also said last week called for changed to the capital rules in order to prevent banks withdrawing from the cleared derivatives business.