CCP frontloading: the pricing nightmare

The pricing nightmare


Frontloading of derivatives contracts is not the most intuitive of concepts to understand. It sounds like it involves some kind of pre-emptive move, where users are ahead of the curve and take action before it is needed. In reality, it’s a very specific term devised by European legislators, which requires derivatives counterparties to retrospectively clear any transaction executed between the authorisation of a central counterparty (CCP) that clears the product and the start of a formal