Esma urges EC to bin frontloading
Benefits of retroactive clearing are "undermined" by its drawbacks, Esma finds
A controversial requirement to retroactively clear over-the-counter derivatives trades should be scrapped, the regulatory body responsible for drafting the rule has recommended.
The so-called frontloading obligation set out in the European Market Infrastructure Regulation (Emir) forces banks to clear OTC derivatives traded up to four months before the start of mandatory clearing, while financial counterparties may have to retroactively clear seven months' worth of legacy trades.
On August 13
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