Clear Street has launched clearing services for registered market makers in listed US equities and options.
Clear Street has launched clearing services for registered market makers in listed US equities and options.
The services will help market makers to expand their current operations while mitigating counterparty risk, the company said, providing insights into the most effective strategies for their requirements.
Kevin McCarthy, chief administrative officer and head of clearing, stated: “As an independent prime broker, we can prioritise client interests without the constraints of standardised capital requirements or conflicting business agendas.
“This grants us greater flexibility and discretion in pricing, seamless integration of new products from exchanges, enhanced customisation, and alignment on risk and margin policies.”
On the wider market landscape, McCarthy told BEST EXECUTION that “the last few years have seen compression and consolidation in prime brokerage and clearing providers, creating barriers for new entrants, which is why there has not been a new entrant to the professional clearing market in the last 10 years. A shrinking provider market makes it difficult for managers to find a prime broker who will prioritize them as clients and leaves fewer outlets for funds to decentralise risk”.
A first market maker has been onboarded, with between two and four expected to join the services over 2024.
Clear Street will continue to expand the suite, it said, with services including futures clearing—following its approval by the National Futures Association in December—and ETF market maker clearing. Speaking to BEST EXECUTION, McCarthy affirmed that the firm plans to offer more complex market maker strategies and correspondence clearing capabilities.
Chris Pento, CEO and co-founder of Clear Street, commented: “[The company’s] ambition is to become a multi-asset provider of clearing and financing services to a global, institutional client base.”
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