ICAP statement on Obama Administration plan for U.S. Financial Regulatory Reform - 2009 - News - In the News - News Events - ICAP.com

18.06.09

ICAP statement on Obama Administration plan for U.S. Financial Regulatory Reform

London/ New York, 18 June 2009 - ICAP (IAP.L), the world’s premier interdealer broker, welcomes the plan announced by US President Barack Obama to strengthen financial regulation, supervision and market infrastructure.

ICAP welcomes the clear statement in this plan that competition between regulated OTC markets and regulated exchange markets will benefit end users of derivatives. We have always operated in competitive markets, both OTC and exchange traded, and believe that the co-existence of both markets is beneficial for all market participants.

We continue to believe that the OTC markets, which play a crucial role in modern finance, can be made more transparent and robust by utilising electronic trade execution and by improving the quality of post-trade infrastructure, particularly by the introduction of clearing for standardized trades.
ICAP supports the US Treasury proposals for standardized OTC derivatives to be executed on regulated transparent trade execution systems. For genuinely benchmark asset classes this will improve the efficiency of these vitally important markets. ICAP already operates such systems in the CDS, interest rate swap, government and corporate bond, and spot FX markets, among others. These systems are implemented and ICAP’s customers are already transacting in excess of US$1 trillion a day on them.

Many of the OTC products that ICAP intermediates already enjoy the benefits of clearing through independent regulated clearing houses, which reduce both individual counterparty credit risk and overall systemic risk as well as increasing capital efficiency. ICAP already directs its customers’ trades in markets as diverse as US Treasuries, repo, mortgage backed securities, commodity derivatives and interest rate swaps to the world’s largest clearing houses.

ICAP welcomes the extension of clearing to additional markets for standardized products. For clearing to be effective, and to avoid the needless creation of harmful monopolies, there should be no exclusive or restrictive links between trading venues and clearing facilities; and we welcome the inclusion in the plans announced today that competition between trading venues will make these markets more efficient.

Contacts
Candice Adam            Corporate Communications                +44 (0) 20 7050 7104
Guy Taylor                    Corporate Communications                +1 201 469 5319

About ICAP
ICAP is the world’s premier interdealer broker and provider of post trade services. The Group matches buyers and sellers in the wholesale markets in interest rates, credit, commodities, foreign exchange, emerging markets, equities and equity derivatives through voice and electronic networks. ICAP has an average daily transaction volume in excess of $2.3 trillion, more than 40% of which is electronic. ICAP is also the source of global market information and research for professionals in the international financial markets. ICAP plc was added to the FTSE 100 Index on 30 June 2006. For more information go to www.icap.com