FCM/Clearing Firm overview
A FCM / clearing firm is an entity meeting the requirements for clearing membership at the clearing house(s) that is authorized to clear any or all of the cleared swaps listed for trading by TraditionSEF for, and on behalf of, participants and customers of TraditionSEF.
FCMs / clearing firms are essential in the compliance with the CFTC’s pre-trade credit check requirement imposed on SEFs prior to the execution of cleared swaps.
Each participant and customer is required to have risk based limits in place via its FCM/clearing firm prior to entering orders for cleared swaps on TraditionSEF.
FCMs / clearing firms have the ability to apply risk based credit limits to TraditionSEF for customers or participants via our native member management console or a third party credit hub.