Penson Gets Jump On Portfolio Margining Technology

Penson Worldwide, which provides a variety of services including clearing and settlement, has begun work on its portfolio margining platform in anticipation of an expansion of the rules. The New York Stock Exchange and the Chicago Board Options Exchange both filed amendments to their margin rules with the Securities and Exchange Commission to allow portfolio margining methodology to expand to include more products. The NYSE proposed the inclusion of margin eligible securities, listed options, while the CBOE proposed the addition of listed equity options and narrow-based index options. Both proposed the addition of security futures and OTC derivatives. Both proposals, filed with the SEC in March, are still under consideration by the regulator.

During a conference call hosted by Penson to announce its pending acquisition of futures clearing and execution firm Goldenberg, Hehmeyer & Co., Phillip Pendergraft, Penson CEO and founder, said the addition of the futures portion of GHCO's business is "especially important if portfolio margining across asset classes becomes more allowed by regulation." He noted that if the changes are adopted, a six-month lag is expected between adoption of the rules and the availability of technology to handle the additions. "We have already begun the process," he said, referring to the additional programming to accommodate the change. A Penson spokesman was unable to provide more detail on the changes