December 5, 2012 / 3:20 PM / in 5 years

TEXT-S&P 2013 outlook for global exchanges/clearinghouses

Dec 5 - Declining trading volumes for global exchanges are turning Standard
& Poor's Ratings Services' outlook for the industry negative, according to the
article, titled "Lower Trading Volumes Will Put Global Exchanges To The Test In
2013 As Clearinghouses Deal With Regulations."

"We expect 2012's drop in trading volumes at both stock and derivative 
exchanges to continue into 2013. This will lower top-line transaction-based 
revenues and operating cash flows, in our view," said Standard & Poor's credit 
analyst Charles Rauch. "However, many exchanges have been improving their debt 
profiles by refinancing or prefunding near-term debt maturities, which could 
help to offset their potentially weaker operating results."

"For clearinghouses, high-quality collateral is increasingly becoming a scarce 
resource. As a result, some are offering collateral management services, which 
can boost revenue," said Standard & Poor's credit analyst Giles Edwards. 
"However, other clearinghouses are accepting lower-quality collateral and 
offering cross-margining services, which could put them at risk of not having 
sufficient collateral to cover losses if a member defaults."

At the same time, national regulators in the U.S. and Europe are calling on 
systemically important clearinghouses to boost their financial safeguards and 
capitalization as mandatory over-the-counter clearing comes into effect. We 
expect that clearinghouses we rate will soon meet these tougher standards and 
that these developments will generally support ratings.

Since the beginning of 2012, Standard & Poor's has taken a number of rating or 
outlook actions on global exchanges and clearinghouses, most of them negative. 
Nevertheless, the industry remains highly rated relative to other sectors 
(such as commercial banks, securities firms, and asset managers) in the 
financial services industry. We rate more than two-thirds of the 17 publicly 
rated companies in the 'AA' and 'A' rating categories, and we rate only one 
company speculative grade.

The report is available to subscribers of RatingsDirect on the Global Credit 
Portal at If you are not a RatingsDirect 
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 
or sending an e-mail to Ratings 
information can also be found on Standard & Poor's public Web site by using 
the Ratings search box located in the left column at
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