US tax fix smoothes way for back-loading buy-side portfolios

US tax fix to aid buy-side portfolio back-loading

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One of the impediments to back-loading buy-side swap portfolios on to central counterparties (CCPs) was removed last month, after the US Internal Revenue Service issued a regulation confirming the assignment of a derivatives trade to a clearing house does not constitute a tax event. The move will alleviate concerns expressed by US mortgage giant Fannie Mae, which claimed in June that existing tax regulations act as a barrier to moving existing portfolios to central clearing.

“From a bottom-line

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