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EC postpones swaps frontloading 

December 22, 2014
Helen Bartholomew, IFR

The swaps market received an early Christmas present this week as the European Commission lightened the burden for loading existing derivatives trades into central clearing by postponing the start-date for the controversial frontloading requirement.

Under new proposals, counterparties will not be required to shift outstanding uncleared swaps into clearing houses until months after the final list of instruments for mandatory clearing is confirmed through the publication of Regulatory technical standards in the Official Journal.

In a letter to the European Securities and Markets Authority, the Commission proposed that the start date for frontloading should be postponed until two months after publication of the RTS for Category 1 clients and five months after publication for Category 2 clients. That effectively moves frontloading to April 2015 for clearing members, and July for other financial counterparties with more than €8bn gross notional of outstanding swaps.

Read more: IFR

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