Brexit novations ‘on hold’ to gain reg relief

Conditional relief would subject early swaps movers to clearing and margin rules

A mass migration of bilateral swaps contracts from London to new European Union hubs is effectively on hold until after the March 29 Brexit date, as regulatory relief protecting transferred contracts from costly clearing and margin rules only becomes effective from the exit date and is conditional on a no-deal scenario. This means firms that move early could be left exposed whether or not there is an eleventh-hour deal.

Brexit subjects an estimated £29 trillion ($37.2 trillion) of non-cleared