Esma clearing draft prompts new focus on frontloading

Dealers may push for get-out clauses in trades with smaller clients

Esma HQ

Dealers are anticipating a range of pricing and contractual headaches as a result of the proposed 18-month grace period given to thousands of firms under Europe's draft clearing rules, released on July 11. So-called frontloading provisions mean all trades executed during this period need to be cleared when the deadline arrives, and some dealers and lawyers warn it is not safe to assume all these firms will have access to a central counterparty (CCP) at that point. If they do not, trades with