HONG KONG Oct 16 CME Group Inc raised
the margins on some products traded on its platform, citing
likely market volatility in the wake of the U.S. debt ceiling
While CME, the largest U.S. futures market operator, said in
a statement that the move is temporary, it is yet another
instance of global trading houses taking steps to shield
themselves from a spike in volatility even as trading volumes
have fallen across financial markets in the first two weeks of
"Anticipating possible market moves specific to this event,
CME will increase margin for all OTC IRS portfolios by applying
the Event Risk margin add-on of 12 percent to the base margins,"
CME said in a notice posted on its website, reffering to
over-the-counter interest rate swaps.
"The additional margin will be implemented across four days
with the first 3 percent increment beginning the margin cycle
for end of day Wednesday October 16th."
The U.S. Senate prepared for a last ditch effort on
Wednesday to avoid a historic lapse in the government's
borrowing authority, a breach that President Barack Obama has
said could lead to default and deliver a damaging blow to the
Last week, Hong Kong Exchanges & Clearing (HKEx) said it
will apply a deeper discount on U.S. Treasuries used as margin
collateral, according to a circular from the clearing house.
HKEx, the holding company for The Stock Exchange of Hong
Kong Ltd, Hong Kong Futures Exchange Ltd and Hong Kong
Securities Clearing Company Ltd, will now apply a haircut of 3
percent versus the current 1 percent for bills with a maturity
of less than a year. The haircuts applied to longer-dated bills