Pooled fund clearing questions vex CVA desks

Dealers and pension funds still waiting for clarity on whether hedging vehicles are covered by Europe's swap clearing exemption

Dealers are struggling to price trades with pooled funds - often used by pension funds to transact over-the-counter derivatives more cheaply - because they do not know whether they will be subject to the clearing requirements laid out in the European Market Infrastructure Regulation (Emir). As a result, the desks responsible for pricing and managing derivatives counterparty risk - or credit valuation adjustment (CVA) - say they cannot decide what to charge.

"We simply don't know how to treat