A factor contributing to this concentration may be higher compliance burdens, where only the very largest of firms are capable of taking on cross-border activity. This concentration creates a higher degree of dependency on this small group of firms. There are also concerns about client access to this limited number of firms offering client clearing services.
For example, there is some evidence of clearing firms “cherry picking” clients, while other end-users are commercially unattractive customers and hence unable to access centrally cleared markets. These are all developments that I believe the international regulatory community may wish to carefully monitor and act on as and when needed.